Preamble

The House—after the Adjournment on 21st December, 1956, for the Christmas Recess—met at half-past Two o'clock.

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — LOCAL GOVERNMENT

Safety in the Home

Mr. Marquand: asked the Minister of Housing and Local Government to which local authorities he has given consent under the provisions of Section 136 of the Local Government Act, 1948, to the making of contributions to bodies established to improve safety or prevent accidents in the home.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): Since the first application made in 1950, consents have been given to forty-five local authorities, whose names I am circulating in the OFFICIAL REPORT.

Mr. Marquand: While congratulating the right hon. Gentleman on his promotion and expressing the hope that he will seek an early opportunity to reverse the decisions made by his predecessor,

may I ask him whether he does not think the number which he has given this afternoon is still rather disappointing, in view of the fact that more children are killed and injured in home accidents than are killed and injured in road accidents, and that the Government grants for the purpose of publicising methods of preserving safety in the home are woefully inadequate compared with those for publicising safety on the roads?

Mr. Brooke: I am grateful to the right hon. Gentleman for his congratulations, though I shall not fulfil his hopes. With regard to the number, I think that the right hon. Gentleman's Question will very likely have the effect of drawing the attention of local authorities to this possibility, and I have no intention of refusing any application of this character if it is reasonably based.

Following are the local authorities:
The County Council of Worcester.
The County Borough Councils of Birming ham, Halifax, Hastings, Preston and Worcester.
The Non-county Borough Councils of Barnes, Beckenham, Bexley, Bilston, Brighouse, Erith, Evesham, Hertford Ilford, Luton, Malden and Coombe, Ripon, Sutton and Cheam, Swindon Uxbridge and Whitley Bay.
The Urban District Councils of Ashford, Beeston and Stapleford, Biggleswade, Billingham, Braintree and Bocking, Coulsdon and Purley, Crayford, East Barnet, Harpenden, Hornchurch, Huyton-with-Roby, Letchworth, Market Harborough, Merton and Morden, Seaton Valley, Shepshed, Street, Waltham Holy Cross and West Bridgford.
The Rural District Councils of Barrow upon Soar, Castle Donington, Evesham and Market Harborough.

Sewage Sludge Treatment

Mr. Russell: asked the Minister of Housing and Local Government what proportion of local authorities arrange for their sewage to be treated together with household and trade refuse and made into compost; and what steps are being taken to extend this practice in the interests both of economy and of public health.

Mr. H. Brooke: Very few local authorities in England and Wales arrange for treatment of these materials together, although many utilise them separately. I will send my hon. Friend a copy of a report on the various methods of treating sewage sludge which was circulated to local authorities in 1954. It is for each local authority to decide what method best suits its own circumstances.

Mr. Russell: Would not my right hon. Friend agree that a great deal of valuable material is wasted in this way, and would he give every encouragement to local authorities to erect plant to deal with it?

Mr. Brooke: This is quite a difficult economic question. I hope that my hon. Friend will study this report which I am sending to him. Before any local authority reaches its decision, it is necessary to see what economic results may follow from a particular policy.

Project, Treweryn

Mr. Gower: asked the Minister of Housing and Local Government (1) what representations he has received concerning a town meeting convened by Liverpool City Corporation on Monday, 17th December, 1956, to consider the project affecting Treweryn, Merionethshire;

(2) if he has yet investigated the extent to which a town meeting convened by Liverpool City Corporation on Monday. 17th December, 1956, to consider the project affecting Treweryn, Merionethshire, contravened the statutory requirements for such a meeting; and if he will make a statement.

Mr. H. Brooke: I have received letters from 17 individuals, and a telegram and a memorial from the Treweryn Defence Committee, complaining of arrangements alleged to have been made for Corporation employees to attend the Liverpool town meeting. I am advised that this meeting was held in accordance with the requirements of the Local Government Act, 1933.

Mr. Gower: While expressing my best wishes to my right hon. Friend in his new duties as Minister for Welsh Affairs, may I ask him whether, in view of the suggestions that corporation officials were cajoled or advised to attend this meeting, it would not be a good thing to clear the air by ordering an inquiry into the circumstances?

Mr. Brooke: I am very grateful for good wishes from Wales, where I was given a very pleasant welcome yesterday. I do not think that I have any power to inquire into what happened on the occasion of the meeting to which my hon. Friend refers. I am merely concerned to see that the provisions of the Act were complied with, and I have received assurances of that.

Mr. J. Griffiths: Since, quite apart from the question of the ratepayers' meeting, I understand that the House itself may be called upon to make a decision on this important matter, will the Minister consider the suggestion made to his predecessor that, in order that the implications, not only for Merioneth but for the whole of North Wales, may be fully in possession of Members of the House, he will ask the Council for Wales and Monmouthshire to examine the matter and make a full report, which will be available to the House before we come to a decision on this matter?

Mr. Brooke: I will certainly consider all these matters. I have, of course, to be careful of what I say in the case of a subject such as this which, I understand, is the subject of a Private Bill to be introduced in another place.

Mr. Gower: asked the Minister of Housing and Local Government the total number of protests and representations he has now received against the proposals of the Liverpool City Corporation affecting Treweryn in Merionethshire; and what action he has taken.

Mr. H. Brooke: Up to yesterday, 65 letters had been received in my Department protesting against this proposal, which forms the subject of a Bill deposited by the Liverpool Corporation. I will certainly bear these representations in mind.

Mr. Gower: In considering the suggestion made by the right hon. Member for Llanelly (Mr. J. Griffiths), surely my right


hon. Friend is not prevented from referring this matter to the Council for Wales and Monmouthshire simply because a Private Bill may or may not pass through this House on a future date.

Mr. Brooke: I will consider that. All I was trying to say at an earlier stage was that, although I am new and inexperienced in my job, I fancy that I should be creating a rather had precedent if I made any kind of policy statement in this House about a Bill which was awaiting consideration in another place.

Mr. Mitchison: Does the right hon. Gentleman not think that the supply of water ought to be made a national—or, shall I say, an international—responsibility?

Mr. Brooke: At the moment, I am glad to say, I have no international water responsibilities.

Mr. Llewellyn: Will my right hon. Friend be guided in all this by the needs of humanity and not by the selfishness of Welsh nationalism?

Mr. G. Thomas: While bearing in mind the Minister's statement that he is new and inexperienced, may I ask him to remember that there is quite a depth of feeling on this matter in Wales, a great deal of it, possibly, without real information, and that if he would refer it for consideration by the advisory council, as suggested by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), he might indeed render good service to Liverpool as well as to Wales?

Mr. Brooke: I certainly assure the House that I understand the depth of feeling that exists in certain quarters about this matter. I am very anxious that the House should come to right decisions about it, and I am ready to make any contribution in my power to that end.

Mr. T. W. Jones: Would the Minister agree that most of the letters which he has received are from secretaries of organisations representing hundreds and even thousands of people?

Mr. Brooke: In fact, the great majority of the 65 letters have been sent by individuals, and reading them I can perfectly understand that many of them express

feelings from the bottom of the writer's heart. I have also received a number, but a minority, of representations from local authorities and organised bodies.

Coast Protection, Norfolk

Mr. Gooch: asked the Minister of Housing and Local Government if he is aware of the concern felt by residents at Ostend, Walcot-on-Sea, Norfolk, whose property is seriously menaced by the continuing erosion of the cliffs; and if he will give his consent to the scheme prepared by the Smallburgh Rural District Council to protect the coast at Ostend.

Mr. H. Brooke: Most of Walcot is now adequately protected by new works, and I hope that the additional groyne which is being constructed near Ostend House will reduce any danger that remains. I have not received detailed proposals for further works at this point; and I am doubtful whether further heavy expenditure from public funds could be justified here.

Mr. Gooch: Is the Minister aware that the sea is continually eating away bits of old Britain; and in this case will he encourage the local authority to come forward with a really worthwhile protection scheme for Ostend?

Mr. Brooke: I have been to Walcot, although not within the last week. I understand the position to be that outline plans have been drawn up by the council, but no formal application has been made in connection with any fresh works except those at Happisburgh, and the Happisburgh works are the only ones that I feel able to consider at present.

Alkali Inspectorate

Mr. Allaun: asked the Minister of Housing and Local Government the number and composition of the staff of the Alkali Inspectorate at the end of 1956; the salaries paid to the various grades; and the total cost of the inspectorate's salaries for 1956.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): One Chief, one Deputy Chief and eight alkali inspectors. I will circulate their salary particulars in the OFFICIAL REPORT. The total cost in 1956 was £17,480.

Mr. Allaun: Is the Minister aware that men of the type and with the qualifications required can demand higher salaries in other spheres?

Mr. Bevins: That may or may not be the case, but should circumstances arise in which my right hon. Friend finds it difficult to recruit men of the right calibre for the work, the matter of salaries will be considered.

Mr. Nabarro: Can my hon. Friend say what steps are being taken to increase the force of this inspectorate, having regard to the provisions of last year's Clean Air Act?

Mr. Bevins: At the moment, the strength of the Alkali Inspectorate is adequate for its present work but directly the need for a larger inspectorate is demonstrated, as we at present hope it will be, then additional men will be taken on.

Following are the salary particulars:


Alkali Inspectorate


No.
Grade
Salary


1.
Chief Inspector
£2,400


1.
Deputy Chief Inspector
£l,650–£2,050


8.
Inspectors
£1,565–£1,915

Mr. Allaun: asked the Minister of Housing and Local Government what proposals he has to increase the number of alkali inspectors; and by how many.

Mr. Bevins: The increased number will depend on future decisions about the scheduling of further works under the Alkali Act.

Mr. Allaun: Does the Minister really believe that ten inspectors for the whole country can deal adequately with the growing task involved, and if he is serious about the subject of clean air, will he consider a big expansion of the inspectorate?

Mr. Bevins: Consultations with the various industries affected are taking place at the present time, and they are going satisfactorily. When those consultations have been completed, and the need for more inspectors is established, more inspectors will be taken on.

Hanley Sewage Works

Mrs. Slater: asked the Minister of Housing and Local Government the reasons for the refusal to commence

extensions to the Hanley sewage works, Stoke-on-Trent; and to what extent such refusal will affect housing development in the area of the eastern valley of the River Trent.

Mr. H. Brooke: Sanction has been withheld because the work is not considered to be sufficiently urgent to warrant expenditure in present circumstances. I have no reason to believe that housing development will be affected.

Mrs. Slater: Is the Minister aware that this continued refusal to give permission to extend these sewage works is giving great concern to the local authority; and that, along this eastern valley, housing development, particularly slum clearance work, will be considerably handicapped if permission is not granted, because we are fast arriving at the stage when these works will be unable to take any further sewage?

Mr. Brooke: I can assure the hon. Lady that I have not overlooked that. According to my present judgment, this is not a work of the greatest priority, but if the council has any further information to give me in support of what the hon. Lady has said—that slum clearance will be held up—I will willingly examine it.

Gas Liquor Effluent, Stoke-on-Trent

Mrs. Slater: asked the Minister of Housing and Local Government what steps he proposes to recommend to deal with the problem of increased amounts of gas liquor at the Etruria Works, Stoke-on-Trent; and to what extent has there been increased pollution of the River Trent.

Mr. H. Brooke: The problem referred to is in the first instance for the West Midlands Gas Board to settle with the sewerage authority for the area and with the Trent River Board. So far as I am aware, there has not been any recent increase in pollution of the River Trent.

Mrs. Slater: Is the Minister aware that the Gas Board has been negotiating with the sewerage committee about the taking of additional gas liquor by the sewage works, but that, at the present time, as a result of what was mentioned in my previous Question, the Hanley sewage works is unable to take any more gas liquor without serious damage to the plant? Is he further aware that, at


present, the River Trent Board is negotiating with the sewage works and the Gas Board? Having regard to the serious pollution of the River Trent, can the right hon. Gentleman not look again at this Question?

Mr. Brooke: I agree with the hon. Lady that this is a matter of considerable importance, but I am extremely anxious that the parties concerned should themselves bring matters to a definite conclusion.

Mr. Jennings: Is my right hon. Friend aware that this type of effluent is helping to turn what was a clean and beautiful river into a filthy one? Is he further aware that no type of animal organism can exist in the River Trent between Stoke-on-Trent and Burton-on-Trent; and is he not of the opinion that his longterm policy for dealing with effluent from the Black Country into the Tame and the Trent should be speeded up?

Mr. Brooke: I think that I indicated, in reply to the original Question, that I did attach considerable importance to this matter. I am anxious not to take a line of my own at this stage because, in certain circumstances, appeal might be made to me, and I do not want to prejudice my own impartiality.

Rent Bill

Mr. E. Fletcher: asked the Minister of Housing and Local Government whether he has considered the resolution, a copy of which was sent to him, passed by the Islington Borough Council on 21st December, 1956, protesting against the provisions of the Rent Bill which will add to the housing problems in Islington; and what reply he has made thereto.

Mr. H. Brooke: Yes, Sir. I am sending the hon. Member a copy of the reply sent to the Town Clerk.

Mr. Fletcher: Is the Minister aware that I have received a copy of that reply, and find it most unsatisfactory? Is the right hon. Gentleman not now convinced that there is mounting indignation throughout London and the country about the provisions of this Bill which will lead to hundreds of thousands of tenants being turned out of their homes on six months' notice, and will he say when he will announce a modification of those proposals?

Mr. Brooke: I certainly want to do my best to satisfy everybody, if it is possible; but I feel some difficulty in answering detailed questions about a Bill which has already been referred by this House to a Standing Committee.

Mr. Mitchison: Can the right hon. Gentleman say if he has any support whatever for the Bill except among members of the Government and certain special interests?

Mr. Brooke: Yes, Sir.

Kent Development Plan

Mr. Sydney Irving: asked the Minister of Housing and Local Government when he hopes to be able to announce his decision on the Kent Development Plan, Part B.

Mr. H. Brooke: A good deal of detailed work has still to be done, and although there will be no avoidable delay I cannot promise that I shall be able to announce my decision much before the end of the year.

Mr. Irving: Will the Minister bear in mind that this delay is causing great difficulty to planning authorities who want to look ahead in their consideration of submissions for the next review, and will he do his best to speed the matter up?

Mr. Brooke: As I say, I am extremely anxious that there should be no delay. There were some 224 objections to the Plan, and I recognise the urgency.

Betsham Road, Swanscombe

Mr. Sydney Irving: asked the Minister of Housing and Local Government if he will now give permission to the Swanscombe Urban District Council to make up Betsham Road, Swanscombe, under the Private Street Works Act, 1875.

Mr. Bevins: As the hon. Member has been informed, my right hon. Friend has felt it necessary to arrange for an inspection of this road before he comes to a decision.

Rate Poundage (Shop Assessments)

Mr. Lipton: asked the Minister of Housing and Local Government by how much local authorities will have to increase the rate poundage to balance the loss of income due to the 20 per cent. reduction in shop assessments.

Mr. H. Brooke: There are too many uncertainties and possible local variations to enable me to make an estimate in this form, but the reduction in rateable value proposed by the Bill amounts to about 7 per cent. of the total rateable value in the current lists.

Mr. Lipton: Is the right hon. Gentleman aware that in Lambeth the rate will have to go up by 1s. on the basis of current requirements, and that that figure is likely to be operative in many other parts of the country? Would it not be better to ease the burden on the ratepayer by making industrialists pay the full rate and not just 25 per cent.?

Mr. Brooke: The effects of this Bill will be debatable when it comes up for Second Reading in this House.

Approved Development Plans

Mr. A. J. Irvine: asked the Minister of Housing and Local Government what arrangements are being made to ensure that those who examine an approved development plan can readily tell what amendments to that plan have been approved by his Department; and what is the effect of such amendments.

Mr. H. Brooke: I am considering whether there is any advice which I can usefully give to local planning authorities about ways of showing amendments to approved development plans so that the effect can be readily understood.

Bulletin of Selected Appeals Decisions

Mr. A. J. Irvine: asked the Minister of Housing and Local Government when he intends to resume publication of the Bulletin of Selected Appeals Decisions, or to initiate some similar publication to take its place.

Mr. Bevins: A further bulletin is being printed and will be available shortly.

Mr. Irvine: Whilst I am obliged to the Parliamentary Secretary for that Answer, may I ask whether he is aware that the former Minister of Housing and Local Government gave an assurance as long ago as 13th December, 1955, that the publication of this important document would be resumed? Will the hon.

Gentleman give an assurance that there will be no further delay?

Mr. Bevins: Yes. I can assure the hon. Member that it will be published within the next three weeks and that thereafter we shall issue an annual report.

Oral Answers to Questions — HOUSING

Northern Region

Dame Irene Ward: asked the Minister of Housing and Local Government whether he is aware of the continued shortage of housing in the northern region; and how this compares with that of other regions.

Mr. H. Brooke: The housing conditions vary greatly in different parts of the region, so that it is not practicable to generalise about the region as a whole or its comparison with another.

Dame Irene Ward: Will my right hon. Friend accept my assurance that on the North-East Coast generally housing conditions are not such as to warrant the introduction of the full implications of the new Rent Bill—[HON. MEMBERS: "Hear, hear."]—particularly having regard to the lack of security of tenure for tenants? May I also ask my right hon. Friend to accept the assurance that would much rather have him as Minister of Housing than a member of the party opposite?

Mr. Brooke: I think that comparisons are odious, but I am always grateful to my hon. Friend. I am not unaware of the difficulty of housing conditions on the North-East Coast. As to the Rent Bill, I think that we shall probably have considerable debates on that subject.

Mr. Marquand: Will the right hon. Gentleman take an early opportunity of considering the representations which were made to his predecessor by industry, both employers and labour, and by local authorities in the northern region about the difficulty of attracting skilled labour to that expanding region, due to the shortage of housing?

Mr. Brooke: That goes further than the Question on the Order Paper. Perhaps the right hon. Gentleman will put down his question.

Rent Bill

Mr. Lewis: asked the Minister of Housing and Local Government what approach he has received from the Trades Union Congress concerning the Rent Bill; and the nature of his reply.

Mr. H. Brooke: I am sending the hon. Member a copy of the letter which my predecessor received from the Trades Union Congress, and of his reply.

Mr. Lewis: Can the Minister say whether the T.U.C. is in favour of this Bill or against it? And may I ask him whether the revolt of the Tory Members who went to see him during the Recess has been instigated by the T.U.C. and those Members who have been to see him are now speaking up on behalf of the workers for the first time in the history of this Parliament?

Mr. Brooke: I have not met any revolting Tory Members.

Mr. J. Griffiths: Are we to understand that if the Minister does meet them he will withdraw the Bill?

Mr. Collins: asked the Minister of Housing and Local Government what reply he has sent to the protest against the provisions of the Rent Bill which was sent to him on 2nd January by the Finsbury Borough Council.

Mr. H. Brooke: I am sending the hon. Member a copy of the reply sent to the Town Clerk.

Mr. Collins: Is the Minister aware that his reply ignores the fact that among privately rented houses in Finsbury one in three will be decontrolled under this Bill, and that the tenants of most of the remainder will have rent increases of more than £1 a week? Will he not look into the special position in the Metropolis and other large cities in order to avoid the unbelievable misery which his Bill will inflict upon the people?

Mr. Brooke: I am a London Member myself, and I hope that I shall keep the special problems of London in my mind throughout the discussions in Standing Committee.

Mr. Hale: Is the right hon. Gentleman not aware that this question of housing is of vital interest to every Member? Does he realise that this is the third occasion today on which he has, quite contrary to

all principle, announced that he is sending a private communication to a Member about a matter on which every one of us would like to be informed? I do not know what the Minister has said to the Finsbury Borough Council, and I should like to know. Is he further aware that, in a previous statement, he has refused to give figures which he has in his possession, and that it has always been the practice up to now to give such figures as are available up to the date of asking the Question?

Mr. Brooke: I can certainly inform the House that a letter was sent to the Town Clerk of Finsbury stating that
The Government, however, believe that the measures provided in the Bill will prevent many thousands of houses from being allowed to decay before their time; and that the Bill will make far more houses available for letting which might otherwise, as at present, be held for sale with vacant possession.

Council Houses (Cost)

Mr. Lewis: asked the Minister of Housing and Local Government by how much he estimates the cost of a council house will rise as a result of the recent increase in building workers' wages.

Mr. H. Brooke: Wages are only one of the items making up the cost of a council house. The recent award will add £8 or £9 to this particular item, but it is not possible to say what effect, if any, this increase will have on the actual cost.

Mr. Lewis: Whilst appreciating that building workers are well entitled to an increase to offset to some extent the continued rise in the cost of living, may I ask the Minister whether he is not aware of the fact that all these increases directly result from the ineptitude and the maladministration of this Government, and particularly of his predecessors?

Mr. Brooke: No, I am certainly not aware of that.

Programme, London Area

Mr. Lipton: asked the Minister of Housing and Local Government how many new dwellings will be provided by local authorities in the London County Council area in 1957, compared with 1956; and at what cost by way of Government subsidies.

Mr. H. Brooke: The number of new dwellings completed in 1956 by local authorities will be published in the quarterly Housing Return on 1st February next. The amounts of the Exchequer subsidy payable on them have yet to be settled with the local authorities concerned. It is impossible to say how many dwellings will be completed during the present year.

Mr. Lipton: As that is likely to show a disturbing decline in the accommodation provided, will the right hon. Gentleman now abandon the cruelly misleading pretence that the housing problem in London and elsewhere is going to be solved within the next twelve months?

Mr. Brooke: I certainly am not one of those who maintain that all housing problems are now non-existent.

Mr. Mitchison: Is the right hon. Gentleman aware that the London County Council has a housing list of over 160,000 cases, about 60,000 of which are really urgent, and that 2,000 cases in three years are all that the Council hopes to deal with?

Mr. Brooke: Yes, I was until very recently a member of the London County Council, which is suffering severely from lack of sites.

Local Authorities' Scheme, South-West Essex

Mr. Sorensen: asked the Minister of Housing and Local Government how many local authorities have initiated, or have become associated with, a plan similar to that in which the borough of Leyton has co-operated with contigous local authorities in dealing with families needing housing accommodation, but who have heretofore suffered a disadvantage through removal from one area to another, and thus have lost long-period residential qualification.

Mr. H. Brooke: I am not aware of any other scheme similar to that in South-West Essex, in which, I understand, eight local authorities are co-operating.

Mr. Sorensen: Does the right hon. Gentleman not consider that this is an excellent plan? What is he doing to commend it to local authorities and encourage its adoption in other parts of the country, particularly in view of the very great hardship suffered by numbers

of people who are at the moment on no housing list and who therefore feel hopeless?

Mr. Brooke: This is a very interesting scheme. I would remind the hon. Member for Leyton (Mr. Sorensen) that, in the Report on Residential Qualifications which was sent to them in 1955, local authorities were recommended to consult together and consider the transfer of applications from one list to another when an applicant leaves an area.

Mr. Sorensen: Will not the Minister draw attention to this particular venture in South-West Essex?

Mr. Brooke: I think that the hon. Gentleman's Question will probably have a considerable effect in that direction.

Building Costs

Mr. Sorensen: asked the Minister of Housing and Local Government the average percentage increase in the construction of working-class houses during each of the preceding five years; and also the percentage increased cost of maintenance of council houses and prefabricated houses, respectively.

Mr. H. Brooke: In reply to the first part of the Question, I would refer the hon. Member to the Answer given by my predecessor to a Question by the hon. Member for West Ham, North (Mr. Lewis) on 31st October last. The figures asked for in the second part of the Question are not available.

Mr. Sorensen: Will the Minister try to secure those figures, seeing that they are of great importance not only to Members of this House interested in this matter—which, no doubt, includes everyone—but also to local authorities?

Mr. Brooke: The fact is that local authorities make no returns of maintenance costs. I am reluctant to add to their burdens, and, of course, local authorities take such different measures of responsibility for repairs in their council houses that I am not at all sure that any returns would actually be meaningful.

Mr. Mitchison: But cannot the right hon. Gentleman use the maintenance costs which are used for the national income and expenditure figures?

Mr. Brooke: I have considered this matter from the point of view of local authorities, and I am bound to say that I do not think that any returns which we ask the local authorities to send in could be added together in such a way that conclusions could be drawn from them.

Rents (Decontrol Policy)

Mr. Blenkinsop: asked the Minister of Housing and Local Government whether he will make a statement regarding the present Administration's policy on the decontrol of rents.

Mr. H. Brooke: There will no doubt be opportunities for discussing these matters in the course of further consideration of the Rent Bill.

Mr. Blenkinsop: Is the right hon. Gentleman aware of the assurance given by the Vice-Chairman of the Hampstead Housing Committee, Councillor Mrs. Henry Brooke, to the effect that Amendments to this Bill will be made? In view of this knowledge, would it not be fair that the House should be informed at the earliest opportunity—now?

Mr. Brooke: I notice that Councillor Mrs. Brooke, who is not Chairman of the Hampstead Housing Committee—

Mr. Blenkinsop: Vice-Chairman.

Mr. Brooke: —but is Vice-Chairman, was incorrectly reported in the Press as saying that Amendments will be made. What she actually said in the course of debate was that this Bill has not yet reached the Statute Book, that it will be open to debate and that it may be that Amendments will be made before it receives the Royal Assent. I am prepared to endorse those very wise words.

Mr. Blenkinsop: As I have taken some trouble to check from those present at the debate the precise words used, may I ask whether it is not highly desirable that a statement should now be made to the House, at the first opportunity, as to the intentions of the Government with regard to this Bill?

Mr. Brooke: I have checked with the lady in question, and I think that the statement that I have just made in answer to the hon. Member fulfils his request.

Rent Tribunals

Mr. Blenkinsop: asked the Minister of Housing and Local Government whether he will make a statement regarding the future of rent tribunals.

Mr. H. Brooke: I have nothing at present to add to the statement made by my hon. Friend who is now Financial Secretary to the Treasury, in debate on the Expiring Laws Continuance Bill on 20th November last.

Mr. Blenkinsop: Is the right hon. Gentleman aware that the continued vacillation of both preceding Governments and, presumably, the present Government, with regard to this matter has made it almost impossible to get effective work done through the rent tribunals? Is is not high time that a statement should be made?

Mr. Brooke: I do not agree at all. I am not vacillating. It was the party opposite which originally put the Act dealing with rent tribunals on the Statute Book, and it was the party opposite which made it temporary.

Mr. Mitchison: Is the Minister aware that his own party used rent tribunals for a new purpose under the 1954 Act? Is is not about time that he told us whether the Government's policy is to encourage the useful work that these cheap tribunals are doing, or the reverse?

Mr. Brooke: As the work of rent tribunals may be affected by the Rent Bill itself, surely the right course of priorities is first to get the Rent Bill through.

Dame Irene Ward: In view of this very complex matter, will my right hon. Friend now consider the advisability of dealing with this whole problem by regions rather than by an overall policy, which seems to give rise to a great many additional complications?

Mr. Brooke: That is a supplementary question which goes a long way beyond the Question on the Paper.

Dame Irene Ward: I wanted to ask it on Question No. 24.

Oral Answers to Questions — EMPLOYMENT

School Leavers (Scottish Apprenticeships)

Mrs. Mann: asked the Minister of Labour when the hon. Member for Coat-bridge and Airdrie may expect a reply to her communication about the question of Scottish apprenticeships for school leavers and their relationship to the English figures.

The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Robert Carr): I wrote to the hon. Member on 17th December, giving her this information.

Mrs. Mann: If it takes five weeks to give me a simple answer to a simple question, how long will it take if I ask a supplementary question with regard to the regional position? Can the hon. Gentleman assure me that the Minister will still be there to give me the reply? If not, to whom can I look on the back benches as the person likely to be able to give me a reply?

Mr. Carr: In the midst of this changing world, in which my right hon. Friend and myself feel rather permanent, I think I can give the hon. Lady the assurance for which she asks. As to the time of five weeks, I told her when she asked her question that the reply would be a few weeks in coming, and she must admit that she has had it within that time limit.

Factory Inspectorate (White Paper Recommendations)

Mr. Willey: asked the Minister of Labour what steps he has taken to implement the Report on Staffing and Organisation of the Factory Inspectorate.

The Minister of Labour and National Service (Mr. Iain Macleod): Action is proceeding on all the recommendations in the White Paper. Some additional staff have already been recruited and others will shortly be interviewed. The boundaries of the inspectorate are being adjusted in order to eliminate overlapping with the normal Government regional boundaries, and a new division has been established with headquarters at Newcastle-on-Tyne. New staff training arrangements are being introduced.

Mr. Willey: I appreciate the progress that is being made, but can the right hon.

Gentleman say whether, in particular, progress has been made with regard to the chemical engineering branch?

Mr. Macleod: We have made most progress so far in the general inspectorate. So far as the engineering and chemical branch is concerned, there are a number of people in the general inspectorate who have the necessary qualifications, and I think it is only fair to offer them the opportunity of transfer first and that we are doing.

Motor Vehicle Industry

Mr. Dodds: asked the Minister of Labour the latest position with regard to unemployment and short-time in the motor car industry; to what extent he estimates that this results from the shortage of petrol and the credit squeeze; and what are the future prospects in this respect.

Mr. Edelman: asked the Minister of Labour how many workers were unemployed or on short time in the motor industry at the latest convenient date, compared with a similar date last year.

Mr. Iain Macleod: On 10th December, 4,400 workers in the motor vehicle and accessories industries were registered as wholly unemployed. Last week 57,000 were reported to be working short time. It is not possible to determine the precise effect of the various factors causing unemployment or to make any estimate for the future, but most of the current short time is attributed to the shortage of petrol. Comparable figures for a year previously are 1,500 unemployed and about 7,000 on short time.

Mr. Dodds: Will the right hon. Gentleman answer the last part of my Question, which asks what are the future prospects in this respect? Is the right hon. Gentleman not aware of the growing uneasiness about the situation and of the feeling that the Government are being too complacent about it? Will he say what is being done to deal with it should it worsen, as the signs at the present time are that it will?

Mr. Macleod: If the hon. Gentleman reads my Answer, he will see that I dealt with the question he asks in the first part of his supplementary question. As to the rest of the supplementary question, I would refer him to either the debate


which we had in the House on employment or to the Answers which I gave to Questions immediately before Christmas. He will see that I showed no complacency at all about the position. Indeed, I said that there was bound to be a worsening of the position in the New Year.

Mr. Edelman: Quite apart from petrol rationing and the credit squeeze, there is a deep malaise in the motor industry. Will the right hon. Gentleman not now commend to the Government that the industry should be nationalized—[HON. MEMBERS: "Oh."]—on the pattern of the highly successful and flourishing Volkswagen and Renault enterprises?

Oil Rationing (Unemployment and Short-Time Working)

Mr. Dodds: asked the Minister of Labour what effect the shortage of petrol and oil has had on employment generally, giving details of the loss of employment as well as short-time working; and the future prospects.

Mr. Lee: asked the Minister of Labour to make a statement outlining the position of unemployment and part-time working and his estimate for the first quarter of the year.

Mr. Iain Macleod: On 10th December, the latest date for which figures are available, there were 297,000 workers registered as unemployed in Great Britain, of whom 29,000 were temporarily stopped. In the week ended 19th January 130,000 workers were reported to be working short time, of whom about 70,000 were, it is estimated, affected in the main by the restrictions on oil and petrol supplies. Redundancies affecting about 14,000 workers have also been attributed to these restrictions.
A seasonal increase in the numbers unemployed is usual in the early part of the year and some additional unemployment is likely to arise this year from the shortage of oil and petrol, but I cannot estimate how many workers or which industries will be affected.

Mr. Dodds: Does not the right hon. Gentleman appreciate that the situation is now much worse than it was when he made his statement before Christmas? Is he not aware that the statement that he then made is not satisfactory to many

people who are worried about employment? Has he not anything more to add about what the Government are going to do about the situation? Or are they complacent?

Mr. Macleod: No. I have invited the hon. Gentleman to consider what I said before Christmas. If he does he will find no trace of complacency in any single one of those statements. Of course I know that the position in the motor car industry gives rise to very considerable concern. This is a matter which the Chancellor, the President of the Board of Trade and I in particular are watching for the future. I announced some relaxations immediately before Christmas.

Mr. Lee: Is the right hon. Gentleman aware that there is now great anxiety in the country because there is a feeling that the Government are losing control of the position? Is he aware that, following the statement of the new Minister of Power yesterday, there is great apprehension whether the Government can maintain some of our vital industries in full production? I refer to the steel industry and to industries of that type. Can the right hon. Gentleman say whether any attempt is being made to get proper priorities of allocation which would enable industries such as the steel industry to maintain their production and thus help the manufacturing industries to maintain theirs?

Mr. Macleod: Of course there is anxiety, but I think it is important for the country that we keep these difficulties in perspective. The figures which I have announced of unemployment are lower than they have been in any year except the last two, and lower for this time of the year than in any year of the Administration of right hon. Gentlemen opposite, though I say that without making any political point. As to the future, the main anxiety, as the hon. Member knows perfectly well, is the question of fuel oil for industry. If stocks can be maintained at their present level, and that depends on many factors not under the control of this Government, or by no means wholly under the control of this Government, I should not think that the position in relation to fuel oil would worsen appreciably.

Mr. Hamilton: asked the Minister of Labour what reply he has sent to the


letter from the Scottish Furniture Manufacturers' Association concerning the threat of unemployment in the industry consequent on petrol rationing.

Mr. Iain Macleod: I have told the Scottish Furniture Manufacturers' Association that I have been in touch with my right hon. Friend the Minister of Transport and Civil Aviation who is fully aware of the special problems of furniture transport and will ensure that, as far as circumstances allow, his regional transport commissioners will do all they can to help.

Mr. Hamilton: Can the Minister give any figures indicating what increase in unemployment there has been in this industry consequent upon petrol rationing? Can he give his assurance that should those figures show a tendency to increase his right hon. Friend will not be wayward in granting the necessary increase in the supply of petrol?

Mr. Macleod: The latest available figures are for 24th November, and that is so long ago that they are out of date in the context of the hon. Member's Question. I will send him the latest up-to-date figures as soon as they are available.

Coal Mining (Hungarian Immigrants)

Mr. Nabarro: asked the Minister of Labour (1) what number of vacancies are registered for coal miners at employment exchanges; whether Hungarian immigrants are being considered; and how many Hungarian ex-coal miners are seeking employment in the United Kingdom;

(2) what steps have been taken by his officers to secure employment of Hungarian immigrants in the Yorkshire coal field.

Mr. Russell: asked the Minister of Labour how many vacancies for miners exist in the coal industry at present; how many applications to fill them have been received from Hungarian refugees; and how many Hungarians have been engaged.

Mr. Iain Macleod: There are 4,700 immediate vacancies in coal mining notified to employment exchanges at present but I understand that about 9,000

extra men could be usefully employed by the National Coal Board over the next few months if they could be recruited at a steady rate and in areas of need. Information is not available centrally of the number of Hungarians who have been identified on interview as ex-coal miners, but my Department and the National Coal Board are seeking to interest all suitable Hungarian immigrants in coal mining employment. About 2,500 have been accepted as potential coal miners. They must first undertake a 12-weeks' course in English. Their allocation to the various coal fields thereafter is a matter for the National Coal Board.

Mr. Nabarro: Can my right hon. Friend say to what extent the legitimate desires of many of these Hungarian immigrants to work in the pits are being frustrated by the attitude of the National Union of Mineworkers?

Mr. Macleod: I think we should recognise first that a great number of people of foreign extraction work in the coal mines at the present time—indeed, no fewer than about 10,000 Poles, E.V.W.s and Italians. The attitude of the National Union of Mineworkers, indeed of all the trade unions, I know is intended to be helpful in this instance. There are, of course, local difficulties. I assure my hon. Friend that I am willing to intervene, but I am quite certain that in this matter it would do harm if I did.

Mr. J. Griffiths: May I ask the right hon. Gentleman whether he does not welcome the wholehearted welcome given by the President of the N.U.M. to any proposal to recruit Hungarians for the mines in this country? Will the right hon. Gentleman inform some of his back benchers how very essential it is, before Hungarians or any other foreigners work in our coal mines, that they should be taught basic English because of very important safety factors? As one with experience of this industry, I know that that is one of the difficulties.

Mr. Macleod: I do not think that that is in dispute. I agree with my hon. Friend in very much hoping that these people will be accepted in the coal mines of this country, where there is immense need for their work, and where, I am sure, they will do excellent work.

Index of Retail Prices

Mr. G. Jeger: asked the Minister of Labour to what extent the reductions in the price of second-hand cars were taken into account in calculating the November Index of Retail Prices.

Mr. Iain Macleod: The fall in the average prices of second-hand cars between mid-October and mid-November represented the equivalent of 0·04 points in the all-items index.

Mr. Jeger: In that case would the Minister be kind enough to explain to the House why he claims credit in the Ministry of Labour Gazette for December for a fall in the price of second-hand cars and claims that that has helped to keep the cost of living steady?

Mr. Macleod: I did not claim anything of the sort. I put that into the December issue of the Gazette because I thought that otherwise I should be asked a silly Question about it in the House of Commons.

Mr. G. Jeger: asked the Minister of Labour to make a statement on the retail price index figure for January, 1957, as compared with that for January, 1956.

Mr. Iain Macleod: The retail prices index figure for 11th December, 1956, has only recently been announced and was 103, compared with 100 at 17th January, 1956. The figure for January, 1957, will not be known until about the third week in February.

Mr. Jeger: In view of the fact that there has been a large increase in the general price level during the last few weeks, has the Minister taken any special steps to inquire how far that affects the cost of living today?

Mr. Macleod: The calendar year 1956 is the best year, with the exception of 1953, so far as prices are concerned, and the index figure which I have given takes into account the increase in the price of petrol but not in subsequent fares increases which may conceivably flow from it.

Mr. Dye: I thought that the Government were going to bring the cost of living down. They said they would.

Thorne Colliery

Mr. G. Jeger: asked the Minister of Labour how many coal miners from the closed pit at Thorne are still unemployed;

and what steps are being taken to find suitable employment for them.

Mr. Iain Macleod: There are 128 workers from Thorne colliery registered as unemployed. One hundred and fifteen of these are over 60 and 12 of the remaining 13 are registered disabled persons. My local officers will do what they can to help to find suitable employment, but there is a scarcity of light work in the area.

Mr. Jeger: In view of the fact that this is a class of person, displaced from a job at a colliery which has been closed for two years, for whom it is most difficult to find employment, will the Minister take special steps to deal with these few men who have given a lifetime's service to a very dangerous industry, or are they now apparently to be thrown on the scrapheap?

Mr. Macleod: It is not true to say that they are being thrown on the scrap-heap. The Answer covered 127 out of 128 and a great number are over 65 and will probably retire when redundancy pay expires. I agree that this is a special problem and I will call for a report on it.

Employment Exchanges (Staffing)

Mr. Lee: asked the Minister of Labour whether, in view of the increased services now required from the staffs of local employment exchanges, he will review the policy of reducing their numbers.

Mr. Iain Macleod: I am satisfied that the staffing economies at local offices, due to changes in organisation, procedure and staffing standards, should go on. The general staffing position at local offices is, however, always under review and the numbers in post are adjusted as necessary to changes in the volume of work.

Mr. Lee: What is the extent of the economies which the right hon. Gentleman has in mind in view of the fact that there is not only an increase in unemployment but also increasing partial employment and that people might be required to go to other jobs? Would the Minister not reconsider the whole question of running down staff at this time?

Mr. Macleod: The figures on which I have been working were given in the OFFICIAL REPORT in answer to Questions by the hon. Member for Walthamstow, West (Mr. Redhead). As to the second


part of the supplementary question, the review of standards takes place twice a year and the matter mainly taken into account is the trend of employment and unemployment.

Coventry

Miss Burton: asked the Minister of Labour whether he is aware of the dissatisfaction among the trade unions in Coventry concerning the notification of vacancies in the city; and if he will reconsider his decision not to reintroduce the Notification of Vacancies Order.

Mr. Iain Macleod: I have studied Press reports about dissatisfaction among trade unions in Coventry. The Notification of Vacancies Order, 1952, did not prohibit the operation of employment agencies, and I see no reason for departing from the view which I expressed to the hon. Member in answer to her Question on 23rd October, 1956.

Miss Burton: Does the Minister ever intend to make any progress at all? Does he realise that in Coventry at present the trade unions believe very strongly that some of the officials in the car factories are receiving commission for giving private information to the private employment agencies about jobs that become vacant? Would it not be a good thing to have an inquiry to find out whether that is correct or not?

Mr. Macleod: I have read all the Press reports. If the hon. Lady has any additional information, I should be very glad if she would come and talk to me about it. A Notification of Vacancies Order would not affect this problem, and the question of legislation to deal with fee-charging agencies was dealt with by the previous Home Secretary before Christmas.

Miss Burton: But does the Minister not realise that I was asking him whether he is not aware that this is the feeling of the trade unions in Coventry and not merely the subject of Press reports? Is he prepared to look into that aspect?

Mr. Macleod: Indeed, I said that I would do so.

Miss Burton: asked the Minister of Labour (1) whether he is aware of the necessity of providing retraining for some of those workers unemployed in Coventry; and if, as a

matter of urgency, he is now prepared to investigate the possibility of such courses being provided by the Government;

(2) whether he is aware that some of those unemployed in Coventry are unable to accept jobs elsewhere because the wage offered is insufficient to meet the obligations of a home in Coventry while living elsewhere; and if, in view of the deteriorating employment position now obtaining in the city, he would be prepared to reconsider his decision not to offer lodging allowances or some similar grant in such cases.

Mr. Carr: The need for training for skilled work in Government training centres has been kept under review but the number of applications for training from persons living in Coventry declined during 1956.

Although there has been a deterioration in the employment position there in the last six months, the number of wholly unemployed is no higher than 1·4 per cent. of the employed population and does not justify the payment of lodging allowances. But I will certainly keep the position under review.

Miss Burton: Is the Minister aware that I have in my possession figures supplied by the Confederation in Coventry on 17th January showing that up to date there are 3,510 workers unemployed in the car industry, and 20,000 on short time? Is he not prepared to look at this matter? Is he not going to do anything to ensure that these people get jobs? There are no jobs in Coventry.

Mr. Carr: The number of unemployed actually grew less in Coventry between September and December, when the percentage was only 1·4. I have not the January figure, which will be available officially in two or three days. The matter will be kept under close review.

Mr. Lee: Will the hon. Gentleman not tell the House about the big increase in part-time employment and is he aware that, judging by the way things are going, these people will soon become unemployed and will bring the figure to about half-a-million? Is he aware that this is a very important issue?

Mr. Carr: I assure the hon. Gentleman that I meant what I said when I assured the House that we would keep the matter under close review, but I was asked about the present position, and that is the Question that I have answered.

Oral Answers to Questions — NATIONAL SERVICE

Deferments

Mr. Lee: asked the Minister of Labour how many grades of people are now being deferred from National Service; the numbers involved; and what effect their deferment is having on the length of service required from others.

Mr. Iain Macleod: As the Answer to the first two parts of the Question contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT. The Answer to the last part of the Question is "None, Sir".

Mr. Lee: Is it not a fact that we now have something which begins to look like a selective call-up and we even have a threat that we may have a sort of Premium Bonds gamble in connection with the remainder? Will the Minister say whether it is the Government's intention to inaugurate a selective call-up or not?

Mr. Macleod: It is true that already more young men are becoming available than the Services need, but that has been dealt with by not calling up or registering the full number of the age groups. Obviously, I have no statement to make, in answer to a Question, on the future of National Service.

Following is the table:


Classes whose call-up is deferred
Number of men in the 1931 and later classes whose call-up was deferred at 1st October, 1956


Apprentices
170,200


Post-apprenticeship deferments
2,800


Articled pupils and other straining for professional qualifications
32,300


Agricultural workers
60,300


Coal mining workers
76,000


Seamen
40,900


Fishermen (Members of Royal Naval Reserve Patrol Service)
1,800


Shale oil miners
170


Police cadets
730


Scientific research workers on high priority work
2,800


Teachers with first or second class honours degrees in science and mathematics
191


Boys at school granted deferment to 31st July, 1957 (to take General Certificate of Education or other external examination)
6,200


Students following full-time courses of further education
50,600


Total
444,991

Note 1

Figures are given for 1st October, 1956, as this is the latest date for which an analysis is available.

Note 2

In addition to the classes set out in the table the call-up of railwaymen in key positions has been suspended since 14th December, 1956, for the period of the present emergency. The number of these deferred at present is approximately 1,000.

Note 3

Men with first class honours degrees in science or engineering, who complete their course of study or training in 1957 and who take up employment in this country which requires a science or engineering qualification of degree standard, will be able to be deferred in 1957.

DISARMAMENT

Mr. Owen: asked the Prime Minister if he is aware of the recent statement by the President of the United States concerning hydrogen bomb tests; and whether he will make a statement on Government policy in this regard.

Mr. G. Thomas: asked the Prime Minister what recent consultations he has had with President Eisenhower concerning hydrogen bomb tests; and whether he will make a statement.

Mr. Fenner Brockway: asked the Prime Minister what representations Her Majesty's Government has made to the Governments of the United States of America and of the Union of Soviet Socialist Republics regarding their recent disarmament proposals; and particularly regarding the proposals made by the President of the United States of America concerning hydrogen bomb tests.

The Prime Minister (Mr. Harold Macmillan): As my predecessor explained on 20th December, Her Majesty's Government are not aware of any new statement or proposals by President Eisenhower personally about nuclear tests. On 14th January the United States Representative at the General Assembly outlined new disarmament proposals for both nuclear and conventional disarmament. These proposals cover both limitation and eventual prohibition of nuclear tests. Her Majesty's Government hope that the Disarmament Sub-Committee will study the new United States proposals most carefully at its next meeting. We


are in close touch with the United States Government on these matters.
As regards the Soviet proposals of 17th November, we have informed the Soviet Government that we consider they could most appropriately be studied in the Disarmament Sub-Committee.
Her Majesty's Government are following the present debate in the United Nations General Assembly with the closest attention and look forward to taking an active part in the Disarmament Sub-Committee when it meets. Meanwhile, Her Majesty's Government still consider that the Anglo-French comprehensive plan offers a satisfactory way of dealing with the problem of nuclear disarmament, and as the House is aware, we are also ready to consider separately The possibility of limiting nuclear test explosions.

Mr. Owen: Is the Prime Minister aware that the voices of Norway and of Western Germany have recently been added to the universal plea for a cessation of nuclear explosions? Is he also aware of the growing public anxiety here at home, and will he not take the intitiative in convening a conference in order that this matter may have the earliest possible consideration of the Powers concerned?

The Prime Minister: I, of course, am only just receiving the telegrams describing yesterday's meeting, and they are being carefully studied. They seem to me to give one ground for hope—the general tenor of the discussion yesterday. I observe that the Norwegian Government, for instance, suggested that there might be a system of registration of these explosions, and that is certainly, in our view, a point of view which ought to be carefully studied.

Mr. Bevan: Has the right hon. Gentleman seen a report to the effect that the United States Government are having private conversations with Soviet representatives on this and allied subjects, and are Her Majesty's Government privy to these conversations?

The Prime Minister: We have had very close contact with the United States Government and private discussions with the United States Government, but I am not prepared, and I am sure that I shall

not be pressed, to say what has taken place in those private discussions.

Mr. Bevan: I did not ask that question. I asked whether Her Majesty's Government were aware of the nature of the conversations taking place.

The Prime Minister: The right hon. Gentleman asked me whether I had seen a Press report. I do not know whether that Press report is accurate or not.

Mr. Bevan: Will the right hon. Gentleman try to be frank with the House? Is he aware that there are reports to the effect that private conversations on this and allied subjects—[H0N. MEMBERS: "When?"]—are taking place between the United States Government and the Soviet Government, and are Her Majesty's Government privy to these conversations?

The Prime Minister: I understand that there have been discussions on purely procedural matters with regard to the meeting of this committee between the Soviet Government and the United States Government. To those discussions we have been privy.

Mr. G. Thomas: Is the Prime Minister aware that, whatever other discussions take place, the rest of the world which does not possess the hydrogen bomb, but which is menaced by these tests, would welcome a moral lead from this country on such an issue?

The Prime Minister: As I have said, I think that the discussion at New York has been hopeful, and I am confident that the work of the Disarmament Sub-Committee will be assisted by the nature of the discussions at yesterday's meeting of the General Assembly.

Mr. Brockway: Is the right hon. Gentleman aware that my question, which he has answered with others, refers to general disarmament as well as to any action regarding the atomic or hydrogen bombs? Will the right hon. Gentleman, in view of the closer approach of the American and the Soviet proposals, take steps to try to bring about the reduction in defence costs which he desires by the most effective method, which is international disarmament?

The Prime Minister: Yes, Sir. It was in reference to the hon. Gentleman's Question that I said, and I repeat, that


Her Majesty's Government still believe that the Anglo-French comprehensive plan offers the most satisfactory method of advance for dealing with the whole question of disarmament, conventional and unconventional.

Mr. Gaitskell: The Prime Minister will recall that his predecessor assured us that his Government would be prepared to negotiate separately on the question of hydrogen bomb tests, apart from general disarmament. May I ask the right hon. Gentleman whether it is the intention of the present Government to treat this matter in that way in the Disarmament Sub-Committee?

The Prime Minister: Yes, Sir. Now that there has been this debate, and since the Disarmament Sub-Committee is to sit almost immediately, I think that it is in that sub-committee that the most likely progress will be made.

BUSINESS OF THE HOUSE

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): I have a short business statement to make, Mr. Speaker.
The Second Report from the Committee of Privileges relating to the complaint of a passage in the Sunday Express newspaper of 16th December last was made available on 9th January. We propose to bring the report before the House tomorrow, Wednesday, and, following precedent, it is thought that the House will want an early opportunity to hear what the Editor of the Sunday Express has to say. Accordingly, a Motion will be proposed ordering his attendance on Thursday. If this course commends itself to the House, it may be felt appropriate not to discuss this matter at length tomorrow, but to reserve the debate until after the Editor has been heard.

Mr. Gaitskell: The course suggested by the right hon. Gentleman is quite acceptable to this side of the House.

Mr. Shinwell: May I ask the right hon. Gentleman whether there will be an opportunity, when this matter comes before the House at the appropriate time, to discuss the general question of the allocation of petrol coupons to all the

constituencies in the country, including Members of Parliament?

Mr. Butler: I should have thought that was a matter on which the Chair would rule. There will be, of course, a Motion for me to move tomorrow, simply that the Report be brought forward, or something of that kind. Whenever there is a Motion before the House there is always an opportunity for debate, which we sometimes know to our cost. There will also be another Motion on Thursday on the same subject. Whether the right hon. Gentleman is able to raise such wide subjects as he has mentioned depends upon his points falling within the ambit of those Motions.

Mr. Shinwell: Does not the right hon. Gentleman realise that it is very difficult for hon. Members to come to a considered judgment on this issue without going into all the details of the allocation of coupons for petrol? Does he appreciate that, and if so, will there he an opportunity for so doing?

Mr. Butler: I think that anybody who has read the Report of the Committee of Privileges will see that the issue is set out and that the facts are given. If the right hon. Gentleman has read it, as I am sure he has, he must be in possession of the facts of the situation. I must leave the Chair to rule as to what is debatable.

Mr. Lewis: The Leader of the House mentioned the Second Report. Is he aware that mention is made in the First Report that an apology had been sent to the hon. Member concerned about two months ago when, in fact, the apology has not yet been received? Can we have some discussion on that? It is not a laughing matter, though the Prime Minister may think it is, it is a serious matter. May I ask the right hon. Gentleman whether he will make arrangements for the First Report to be discussed in the debate on the Second Report if the promise and the pledges therein mentioned have not been carried out?

Mr. Butler: As I understood—and I can only speak as one member of the Committee of Privileges—the particular issue which we regarded as a very important one, which affected the hon. Gentleman himself, was disposed of by the apology made, and, therefore, the Report


was not brought before the House. That is the situation with regard to the First Report, the outcome of which I should have thought the hon. Gentleman would regard as satisfactory.

Mr. Lewis: If I may ask again, is the Leader of the House aware that although the Committee of Privileges was told that an apology was sent, the apology has not been sent—at least up to now? It is now four or five weeks after the incident and no apology has been received by the hon. Member concerned. As the Committee was told then that an apology had been sent, what does the Committee intend to do about it?

Mr. Butler: That is a fact which I should like to consider. Perhaps the hon. Gentleman will put it before me and then I can consult my colleagues on the Committee of Privileges.

Mrs. Mann: Is the right hon. Gentleman aware that there are many people in this House and outside it who regard the allocation of petrol to constituency parties as unpardonably high, and who think that it ought to be reduced? Should not the House have the opportunity of discussing that before bringing anyone to the Bar of the House to make any apology?

Mr. Butler: I think that there are two separate questions. One is the question of contempt—that is, observations about Members of Parliament themselves, which was cleared up by this Second Report. There is a completely different question, the allocation by a Government Department to particular agencies of petrol coupons for their use. The latter question is one which I should have thought ought to be raised as an ordinary matter on the Floor of the House and answered by the Government. The questions should be differentiated.

THE PRIME MINISTER

Tributes to Sir Anthony Eden and Welcome to Mr. Harold Macmillan

Mr. Hugh Gaitskell: Before we proceed to the business of the day, I ask leave of the House to refer to the event which is in all our minds—the resignation, through ill-health, of the former Prime Minister. Sir Anthony Eden.
It may seem strange, Sir, that the privilege of being the first to pay tribute to a retiring Prime Minister should fall to the Leader of the Opposition, his most direct political opponent. Yet I feel that this custom illustrates a characteristic of this House of Commons often commented on by foreign observers, that we find it possible to engage in the most bitter political debates in this Chamber without—at least, for long—damaging our personal relationships.
It is always a sad occasion when someone who has been a Member of this House for a long time, someone who has impressed his personality upon all of us, someone who has held the highest offices of State, leaves us, but our sorrow is much greater when the cause of the change is a serious illness, an illness which I cannot but feel is itself associated with the heavy strain of Ministerial and Parliamentary responsibility over many years.
To most of us, I am sure, the announcement of Sir Anthony's decision came as a complete surprise. We had hoped that his health, though temporarily impaired, had been restored when he returned from Jamaica. Evidently this was not the case. We must all hope that the longer rest which he can now take will give him the convalescence he requires, and that in the next few months he will fully recover his former health.
During recent months we on this side of the House have very strongly disagreed with the policies of the late Government. To pretend that these differences did not exist would be dishonest and, indeed, absurd. To emphasise them today would be wholly out of place. I prefer, therefore, to ignore them and to concentrate such remarks as I have to make on the very distinguishd career of Sir Anthony Eden from the day when he first came to this House.
Sir Anthony came here as a young man of 26, in 1923. Three years later he began his long association with the Foreign Office, first as Parliamentary Private Secretary to Sir Austen Chamberlain, then, in 1931, as Parliamentary Under-Secretary, later as Minister of League of Nations Affairs, and, finally, in 1935 as Foreign Secretary.
Though I had the privilege of knowing him personally only during these last eleven years, I well remember the impression he made upon us during the 'thirties. We who were somewhat critical of the policies of Mr. Baldwin and Mr. Chamberlain looked upon Sir Anthony in those days as representing within Conservative Governments a more progressive outlook in foreign affairs than that of some of his colleagues. We welcomed particularly his activities on behalf of the League of Nations and his clear support for the principles of collective security. We applauded his courage in resigning from the post of Foreign Secretary, in 1938.
But it is, of course, of his work in more recent years that I, for my part, can speak with more direct experience. We in this House all recognise in him an outstandingly gifted Parliamentarian who, time and again, deeply impressed not only his own side but the whole House with his contributions to our debates. In many speeches on many occasions both from this Opposition Bench when he was deputy Leader of the Conservative Party, and later, as Foreign Secretary and Prime Minister, from the Government Bench opposite, he commanded the respect and general support of the House as a whole. He combined intimate knowledge, great experience and grasp of detail in the field of foreign policy with a very happy manner of speaking and unusual personal charm.
In addition to his talents in this House, he was also a most effective politician, in the best sense of that word, in his relations with the public. Indeed, through his work over the years in the international field he won the confidence of the British people as a whole in a manner granted to few.
Nor can there be any doubt as to his outstanding diplomatic ability. Out of many sucessful international negotiations which he conducted, two comparatively recent ones come at once to our minds—

his remarkable achievement in bringing about the Paris Agreements within a few weeks of the collapse of the European Defence Community project, and his successful handling of the Geneva negotiations on Indo-China.
Thus, today, in taking leave of him, we send him greetings and good wishes, and, above all, our hope that his health may be speedily repaired so that he may continue to serve his country and the world for many years to come.
I would also offer to his successor, the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan), our congratulations and strictly personal good wishes upon his appointment. I cannot say that we wish him to have a long tenure of office. Nor can I hold out any hope that we shall give him an easy time—he would not wish it. His policies will be most closely scrutinised and, in so far as they seem to us inadequate or wrong, most strenuously resisted. We shall be happy to relieve him of the burden of office whenever he likes. But, meanwhile, at the beginning of what may be a series of stormy Parliamentary battles, we extend to him these few words of personal good will.

Mr. J. Grimond: My colleagues and I would like to join the Leader of the Opposition in expressing our deep regret at the illness of Sir Anthony Eden and in offering, too, our perhaps modified congratulations to the new Prime Minister and wishing him personal success.
Sir Anthony rendered this country very great service in a number of offices, particularly at the Foreign Office. He wore himself out in the work which he did for this country, and it must be a matter of great sorrow to us all that he has had to go in these circumstances. All I feel that we can do now is to wish him good luck on his voyage and a happy return to this country, restored in health.

Mr. David Grenfell: This is an occasion when I feel that the recognition given to my seniority in the House should be addressed to all my colleagues here and to the public outside. I am not speaking as a party man at this moment.
I wish to refer to the resignation of Sir Anthony Eden and his departure from the House, but I do not wish to say anything that will convey an impression that I have


strong personal approval or disapproval of anything that has been done in recent weeks.
We do not dispose of the leaders of parties or of Her Majesty's Ministers: there are circumstances which determine the tenure of Government offices. We are to take responsibilities in this House, and our powers are limited by public opinion and the public will. This is an occasion of exceptional significance to hon. Members and to the parties with which we are associated. I do not wish to give an appearance of criticism or reproof at this stage.
Parliamentary history has been written in strong terms here in recent weeks. There are outstanding gaps in our Parliamentary structure. I do not wish to criticise the conduct of any leaders today. Discussion will be forced upon us here and in the country. I sincerely hope the House will fulfil its responsibility for reorganisation now that there are vacancies to be filled and opportunities for Parliamentary power to be made permanent and effective.

The Prime Minister (Mr. Harold Macmillan): My first duty is to thank the right hon. Gentleman the Leader of the Opposition and the other hon. Members who have spoken for what they have said this afternoon about Sir Anthony Eden. He has been struck down in the prime of life by serious illness, and I know that he and Lady Eden will be encouraged by the good wishes which have been expressed today for his speedy recovery.
This is not the time, nor have I the qualities, to attempt any appraisal of Sir Anthony's political achievements. I have been a close personal friend of his for thirty-three years since we first entered the House of Commons together, and during many of those years I have worked in close association with him.
Among the many qualities of Sir Anthony Eden—great diligence, tact, charm, and very high skill in negotiation—I think there are two which, when the full history of his career is written, will be regarded as outstanding. Throughout his whole political life he has shown complete integrity in every sense of the word. He has also shown on many occasions rare courage. He has

always done what he thought was right, and we can pay no greater tribute to any man.
Some very kind words were said by the right hon. Gentleman the Leader of the Opposition about myself. Of course, I know that these are to some extent the stylised preliminaries to combat, like the salutes between duellists. Nevertheless, the House of Commons has also such traditions of good fellowship that I feel that there is a genuine welcome given by the House as a whole to any of its Members called upon to undertake the great tasks which have fallen to me.
I can only say that I have been much touched by the kindness which has been shown to me on all sides of the House, and that I will do my best.

COMPLAINTS OF PRIVILEGE

Mr. George Wigg: With your permission, Mr. Speaker, I want to raise a question of Privilege. On 17th December the hon. Member for Eastbourne (Sir C. Taylor) complained of a passage in the Sunday Express of 16th December and the matter was referred to the Committee of Privileges.
On 21st December, in the B.B.C. programme called "Any Questions" a discussion took place on petrol rationing and Mrs. Mary Stocks, in the course of that discussion, said:
… The only people who are really well off under this rationing scheme are M.P.s and potential M.P.s who are nursing constituencies and who, apparently, have as much petrol as they want to drive about their constituency.
I have obtained from the B.B.C. a copy of the script and you will observe, Mr. Speaker, that the B.B.C. is aware—

Mr. Charles Pannell: On a point of order, Mr. Speaker. Will you please inquire whether there is anything wrong with the microphones or what the row is in the House? We simply cannot hear my hon. Friend.

Mr. Speaker: I was more fortunate. I could hear the hon. Member quite clearly, but, then, he is closer to me. I do not think that there is anything wrong with the microphones.

Mr. Wigg: I have obtained from the B.B.C. a copy of the script and you will observe, Mr. Speaker, that the B.B.C. is aware of the matter, for on the slip attached are typed the words, "Relevant item on page 10."
In my submission the words used constitute a breach of Privilege, but the most serious aspect of the matter is that after the complaint had been referred to the Committee of Privileges, and before the Committee had reported, views were expressed similar to those that caused the original complaint. In other words, while the matter was sub judice, the original offence was repeated. In my submission, that is not all. Clearly, the B.B.C. is in a different, and more difficult, position than the editor of a newspaper who sees the words in front of him before he authorises publication, because the B.B.C. is faced with the words only after they have been spoken. But in this case, the B.B.C. had, from 21st December, a matter of four or five weeks in which to retract and apologise, and it is the failure of the B.B.C. to acknowledge and accept responsibility for what was said that constitutes the most serious aspect of this case.
I submit that not only the words themselves but the discussion of a matter which was sub judice and the failure to take appropriate action after the broadcast make it imperative that the matter should be considered by the Committee of Privileges. I trust, therefore, Sir, that you will rule that a prima facie case of breach of Privilege has been established.

Mr. Speaker: Will the hon. Member bring the document to the Table?

Copy of the said document delivered in.

Mr. Speaker: I have heard what the hon. Member for Dudley (Mr. Wigg) has put before the House In view of what has occurred, I think that he has established a prima facie case. In saying so, I do not in any way prejudge the view, which is one for the House, whether there has been a breach of Privilege or not. It only means that I will now accept a Motion on the matter.

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): I beg to move,
That the matter of the complaint be referred to the Committee of Privileges.

Question put and agreed to.

Mr. Godfrey Lagden: I wish, Mr. Speaker, to bring to your notice and that of hon. Members a matter published in the Romford Recorder newspaper and supplied to them by Mr. Donald Paterson which, in my opinion, is a serious breach of Privilege.
The matter to which I refer was published on 4th January, 1957. The House will recall that at that time the Committee of Privileges was considering certain allegations made by another newspaper about the supply of petrol to hon. Members. I submit that this should have made for greater care being taken in this particular instance.
In large black print on the central page of this paper, under the heading, "M.P.s Too Kind to Themselves," there appears the following:
In common with M.P.s and other prospective Parliamentary candidates, I have just been allocated a supplementary petrol ration to cover 750 miles per month—this in addition to my 200 miles basic for private motoring.
Such an allocation is outrageously high—particularly when one considers how shabbily industry and people like commercial travellers are being treated.
I have heard it said that the best club to belong to is the House of Commons. The privileges granted to its Members certainly seem to be on the increase even if democracy is suffering as a result.
Moreover, it is my opinion that, in the light of their sad record over the past few years, which has more than anything else been responsible for the present crisis and petrol rationing, the very last persons to have supplementary rations should be Members of Parliament.
As a result of this publication, Mr. Speaker, I have been told by many persons who have wished to consult me on petrol problems that they cannot expect sympathetic treatment from Members of Parliament who are treating themselves so well. One deputation of commercial travellers which I received confirmed this view to me. If hon. Members of this House are to carry out their duties, such untrue allegations must only hinder them and prevent them from doing their duties and disturb public opinion. I ask, Mr. Speaker, for your ruling that a serious breach of Privilege has occurred and that a prima facie case has been made out.

Mr. Speaker: Will the hon. Member bring the newspaper to the Table?

Copy of the said newspaper delivered in.

Mr. Speaker: As the hon. Member has read the relevant passages, I will not ask the Clerk to read them again.
I have received notice from the hon. Member for Romford (Mr. Ledger) that there is another complaint which is connected in its facts with the one that we have just heard, so perhaps it would be more convenient if we heard him first and I then ruled on them both together.

Mr. Ron Ledger: I am well aware that hon. Members may be a little weary of these complaints—[HON. MEMBERS: "Hear, hear."]—but that depends on whether they actually arise in their own divisions or not. I suggest that if hon. Members happen to have a local newspaper in which such statements are made, they may take a very serious view of them and raise the matter themselves.
I want to support the hon. Member for Hornchurch (Mr. Lagden), because these statements appeared in Romford papers. I read these particular statements as I was opening my mail, in which I received my supplementary allowance which was for 100 miles of motoring a month—which was totally inadequate. I immediately wrote to the prospective Liberal candidate and informed him of that, and I expected that in the paper the next week an apology would be made.
I think that there is a further breach of Privilege in the statement which was then issued by the prospective Liberal candidate to the local paper:
Comment on this question, he told the Recorder, has been 'effectively muzzled' by the recent action of the House of Commons Committee of Privileges against the editors of two national newspapers.
I suggest that this criticism of the Committee of Privileges is completely unjustified, especially in view of the fact that the prospective Liberal candidate had before him the facts about the supplementary allowance for M.P.s.
It is particularly serious, because I received an anonymous telephone call, probably from one of my own constituents, probably a commercial traveller, in which it was suggested that I was incompetent to deal with inquiries about supplementary petrol rations if I was getting more than sufficient for my needs, as was suggested in these reports. The caller made a request that I let him have some of my allowance.
It will be absolutely impossible for hon. Members to deal with this very thorny matter of inadequate petrol supplies unless it is made absolutely clear by someone in authority what the allocation to hon. Members actually is. I submit that I have established that there has been a breach of Privilege, Mr. Speaker.

Mr. Speaker: Will the hon. Member bring the newspaper to the Table?

Copy of the said newspaper delivered in.

Mr. Speaker: It is, of course, for the House to decide whether what we have heard constitutes a breach of Privilege, but, concerned as I am with the procedure of the matter, I consider that both hon. Members have made out a prima facie case with regard to the complaints they have made, and that I should, therefore, accept a Motion on the matter.

Mr. R. A. Butler: I beg to move,
That the matter of the complaints be referred to the Committee of Privileges.
I should like to say no more on this subject, but simply to move that Motion, Mr. Speaker.

Mr. Godfrey Nicholson: I feel that the House of Commons is in danger of making itself slightly ridiculous. I am sure that I speak for every hon. Member here in saying that the honourable reputation of the House of Commons is very near to our hearts. But this is not the way to sustain it. We are in danger of becoming pompous and hypersensitive. The truth is great and will prevail. If the facts are made known to the country, that will be the best way of protecting our reputation. A reputation for touchiness and undue sensitivity is not the way to do it.

Mr. F. J. Bellenger: On a point of order. Is not the matter which is now to be referred to the Committee of Privileges more or less sub judice? [HON. MEMBERS: "No."] Should we not prejudge the issue by debating it now? Should not the matter be debated when the Report of the Committee comes before the House?

Mr. Speaker: I have merely proposed to the House the Question, "That the matter of the complaints be referred to the Committee of Privileges", but the House has not yet ordered them to be so


referred. The matter is still in the hands of the House and any hon. Member can say anything relevant to the Motion.

Mr. Nicholson: I did not hear all that was said by the right hon. Member for Bassetlaw (Mr. Bellenger), Sir, but I do not wish to detain the House. I want merely to say that we are taking a sledge hammer to crush a nut. We are making a great mistake in taking this matter too seriously.

Mr. E. Shinwell: While it may appear to hon. Members that we must not seem to be too sensitive to public opinion, nevertheless it is the duty and responsibility of hon. Members to repel serious allegations about their behaviour. We are, therefore, justified in asking that these matters should go before the Committee of Privileges. I am bound to say that I cannot see how it will be possible to debate the Committee's Report without having a full statement from the Government about the allocation of petrol coupons not only to hon. Members but to Parliamentary constituencies. We must have all the facts established to enable us to form a sound judgment on the matter. Would it be possible for the Leader of the House to arrange a debate on this subject before we consider the Report from the Committee?

Mr. Desmond Donnelly: I want to support what the hon. Member for Farnham (Mr. Nicholson) has said. The short point is that the House has made itself the absolute authority in the country. In that position we have to be very careful about how we use that authority if we wish to retain it in the public mind. In this case the facts speak for themselves. What does it matter if some people say that we have too large a petrol allocation, if we do not? If we have too much, it does matter, but if we do not have too much, it does not matter.

Mr. Ellis Smith: It does matter.

Mr. Donnelly: It does not matter. I am prepared to ignore that kind of criticism.
Could the Leader of the House find some procedure by which we could dispose of these cases without making too heavy weather of them, without dragging somebody to the Bar of the House of Commons to explain himself and without

bringing Parliamentary Privilege, which is very important indeed, into the position where it is lightly regarded by the public?

Mr. Edward du Cann: I want most warmly to support the point made by my hon. Friend the Member for Farnham (Mr. Nicholson) and by the hon. Member for Pembroke (Mr. Donnelly). It seems to me that there is nothing in these cases. I thought when I heard the hon. Member for Dudley (Mr. Wigg) and the hon. Member for Hornchurch (Mr. Lagden)—

Mr. Aneurin Bevan: On a point of order. Surely the hon. Member for Taunton (Mr. du Cann) is guilty of a grave discourtesy to the Chair. The Chair has ruled that a prima facie case been made out. To say that there is nothing in them is to reflect upon the Chair.

Mr. du Cann: I am sure that you will accept, Mr. Speaker, that I meant no discourtesy to you. I believe that the House is being unnecessarily pompous and making itself a laughing stock in the country by taking these minor criticisms seriously.

Mr. R. A. Butler: In reply to my hon. Friend the Member for Farnham (Mr. Nicholson) and my hon. Friend the Member for Taunton (Mr. du Cann), may I say that the right hon. Member for Ebbw Vale (Mr. Bevan) is quite correct about the procedure of the House. You, Mr. Speaker, have ruled that there is a prima facie case of breach of Privilege. There is no alternative but for the Leader of the House to have this matter examined by the Committee of Privileges.
That in no way prejudges what Report may be submitted by the Committee which is a Committee of our own number and of our most senior Members. All I am doing is proposing that these matters be examined by the Committee. The fact that I have made no observations is more in line with your Ruling, Mr. Speaker, than are the observations which have been made. That does not mean that the Motion is not debatable. It is in order for hon. Members to say that they do not want the matter to go to the Committee of Privileges, but I submit that I am right in asking that it should go before the Committee.

Mr. Henry Usborne: I do not think that anybody would deny that a prima facie case has been made, and that, in ordinary circumstances, the Committee of Privileges would probably find that there was a genuine breach of Privilege. The point is that it is silly now to press this point. The right way to handle the matter is for us, in the House of Commons at this moment, to accept the fact that we are making much too much out of this, and that the right answer to these criticisms—which, I think, are unfairly made—is to publish the facts and let the people know the truth.
I suggest that the House should reject the Motion which is now before it, but that it should also request the Government or the responsible Minister to publish a detailed list of the allocations of petrol which have been made to Members of Parliament. I am not the slightest bit ashamed to say what has been allocated to me. I think that it would be far better if my constituents and everybody else knew what I got. I believe that that is the right way to deal with this affair. [HON. MEMBERS: "What is your allocation?"] It happens to be 14 gallons a month—about one tenth of what I needed.

Mr. Sydney Silverman: I suggest to the House that if anything would bring the proceedings of the House into ridicule it would be to continue this debate at this time, or to refuse to pass a Motion which, as the right hon. Gentleman has said, is the inevitable consequence of the Ruling which you, Mr. Speaker, have given. To use this occasion to debate the merits of the particular point raised would obviously be undesirable, and it is even more undesirable to drag into the debate a discussion of what the Committee of Privileges may have reported in regard to another matter altogether.
The question whether or not matters are too trivial to be referred to the Committee of Privileges has always been dealt with in the House in a recognised way, which has been followed today. It has always been left to Mr. Speaker to decide whether there is sufficient in the point raised to justify the matter being dealt with by the House of Commons there and then, without the necessity of putting a Motion on the Order Paper, to take its

chance with other questions in the day-to-day conflict over time.
I do not think that there is any precedent—there is none that I recall, at any rate—for the House of Commons deciding not to refer a question to the Committee of Privileges when the Speaker of the day has ruled that it is proper for the question to be debated there and then.

Mr. Leslie Hale: There are plenty of precedents. I myself raised an issue of Privilege upon which there was the clearest Ruling that a prima facie case had been made. The case involved the Attorney-General of Northern Ireland. An apology had been sent to the House and, with the complete concurrence of everybody in the House, I believe, I moved that the matter be not referred to the Committee of Privileges and that the apology be accepted.

Mr. Silverman: I am much obliged to my hon. Friend, but the case to which he has referred is a totally different kind of case from that with which we are now dealing. The circumstances are quite different. A change of circumstance had taken place in that matter.
I can recall no case—containing no adventitious circumstances of that kind—in which the House of Commons has refused to send a matter to the Committee of Privileges after the Speaker of the day has ruled that there was a prima facie case. I should think that the dignified course for the House to pursue would be to let the matter go to the Committee of Privileges without further comment at this stage.

Mr. George Thomas: I hope that the House will accept the Motion to refer the matter to the Committee of Privileges, but I hasten to say that I disagree with my hon. Friend, who would apparently like to reduce the liberties of Members of the House. The fact that a custom has not been followed for many years does not reduce its importance to the House. Upon a future occasion we might well require to question the wisdom of a matter going to the Committee of Privileges. Hon. Members should be free to question such a course being adopted if they so wish.
I rise only because I believe that this opinion about the House getting touchy has been spread by the Press. The Press itself is very touchy. Anyone who


criticises a newspaper is in for a bad time. The newspapers seem to feel that they have a special privilege and that we have committed a breach of Privilege in sending these matters to an honourable Committee of the House.
During my time in the House—and I have been here for twelve years now—we have never, to my knowledge, treated questions of Privilege lightly. If they are frivolous, we have a Committee that knows how to deal with them. I believe that the good name of the House can safely rest, for the time being at least, with the Committee entrusted with the consideration of these matters. I earnestly hope that we will not be browbeaten in this matter by the attempt of some newspapers to prevent us clearing our name.

Mr. J. A. Leavey: I humbly seek your guidance on one point, Mr. Speaker. You having ruled that there is a prima facie case for referring this matter to the Committee of Privileges, and my right hon. Friend the Leader of the House then having risen, almost as a formality, to move the Motion, is it not a breach of respect to the House, at least, if not a breach of Privilege, to vote against that Motion? If we are not permitted to debate the position, presumably, by voting upon the issue, we are supporting a point of view. It seems to have been suggested that it is improper to speak to this Motion in a contrary sense. Therefore, it would seem to follow that it would be wrong to vote against it. I earnestly seek your guidance, Mr. Speaker.

Mr. Speaker: I can tell the hon. Member straight away that there is nothing wrong, or unconstitutional, or contrary to the practice of this House in the House refusing a Motion that a matter be referred to the Committee of Privileges. The duty of the Chair is to see that the minimum requirements which constitute a prima facie case of breach of Privilege are present, and he merely says that they are in order to give the Motion priority over the Orders of the Day. That does not imply either a Ruling on the part of the Chair that a breach of Privilege has been committed or that the House ought to send the matter to the Committee of Privileges. It is entirely a matter for the House to debate. For

example, there are many technical breaches of Privilege, such as giving reports of our debates in the Press, which the House has been content to ignore for a large number of years but which, if they were raised, would no doubt still be considered as technical breaches of Privilege. There may be many other such cases.
The duty of the Speaker is to safeguard the House from entirely frivolous invocations of the law of Privilege. In this ease, in view of what has happened in an earlier case, I took the view—as the House took upon the earlier occasion—that it was my duty so to rule. But it is by no means incumbent upon hon. Members to vote either for or against the Motion.

Mr. Bevan: I would like to draw your attention, Mr. Speaker, to the fact that many newspapers have now restored themselves to a respectful attitude to the House by not reporting the proceedings of the House at all.

Sir Ian Fraser: Does the fact that these cases are referred to the Committee of Privileges make the whole matter sub judice, so that no statement can be made by the Minister as to the facts of the case? It seems to me that the facts of the matter are almost more important than anything else, and I should not like to think that deferring consideration of the matter until the Committee has met and reported would prevent the nation from knowing the facts immediately.

Mr. Speaker: I do not think that that consequence would flow from the Motion being accepted. I think that the Committee, if it considers the matter, can take any evidence it likes from anyone to the question of Privilege. I think that the question of petrol allocation and the question of Privilege are two different things.

Mrs. Jean Mann: I wish to support the suggestion that the Motion be not remitted to the Committee of Privileges. I think that it is becoming rather a farce. I am exceedingly surprised at these requests coming from Members of Parliament, who, in their day and generation, like myself, must find some of the things said about them now mild indeed, compared with what was said about them at one time.
I am told that this breach of Privilege is an attempt to prevent a concerted attack which, in concert, it is very difficult to raise in an action, say, for libel. But look at the concerted attacks made on the working-class. Who suffered more than the miners from these kind of attacks; or the engineers; or the shipbuilders? When I hear hon. Members talk so volubly about their dignity, I begin to wonder whether they have so little dignity that they require the time of the House of Commons to be taken up in maintaining what they have.
I ask, even though this Motion be carried, that there should be a debate on a scandal that is taking place today. I refer to the enormous allocation of petrol being given to constituency parties. If there is a Liberal Party, it has its allocation; if there is a Tory Party, it has its allocation; if there is a Labour Party, it has its allocation. What for? To cancel each other out. That is—

Mr. Speaker: Order. If the hon. Lady is suggesting that there has been maladministration in this matter, that is a matter for the Government, and not for me, or for the House on this Motion and the Question before it. The Question is, "That the matter of the complaints be referred to the Committee of Privileges."

Mrs. Mann: On a point of order, Sir. I feel this particularly, because there are milkmen in my constituency who cannot get petrol so that they can deliver milk. I suggested that one of those should be run by an election agent—

Mr. Speaker: Order. The hon. Lady must choose a suitable opportunity to raise the matter, and that is not now.

Viscount Hinchingbrooke: I do not think that I heard my right hon. Friend the Leader of the House say whether he agreed with us that this should be passed on to the Minister of Transport and Civil Aviation, or the Minister of Power, as the case may be, and a request made that the full facts of what is issued to Members of Parliament and to constituency parties should be published. I hope that my right hon. Friend will agree that that is desirable. That is the best answer Parliament can give to these allegations or suppositions; that the full amounts which have been issued should be publicised. If they are found to be excessive in the case of constituency parties, they should be substantially reduced.

Mr. R. A. Butler: In answer to my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke), I should like to say that the facts are almost in toto in the Second Report. But, in so far as they are not—there is certainly nothing to be ashamed of in the facts being stated—I will, without prejudice to the Motion or to your Ruling, Mr. Speaker, discuss the matter with my right hon. Friends concerned.

Question put and agreed to.

BUSINESS OF THE HOUSE

Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. R. A. Butler.]

BRIGADIER SIR CHARLES HOWARD, G.C.V.O., D.S.O.

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): I beg to move,
That Mr. Speaker be requested to acquaint Brigadier Sir Charles Alfred Howard, G.C.V.O., D.S.O., that this House entertains a just sense of the exemplary manner in which he has uniformly discharged the duties of the office of Serjeant at Arms, and has devoted himself to the service of the House for a period of over twenty-one years.
Sir Charles Howard has occupied, with no less distinction than courtesy, one of the most important, onerous and yet unpublicised positions in the realm. To my knowledge, no poet has turned an elegant lyric in praise of the post of Serjeant at Arms. This is not because the post is unhonoured—all of us here know the respect and dignity which it carries—but because, I think, this is an Assembly which sets great, and perhaps too much, store by the spoken word; whereas it is the function of the Serjeant at Arms to do rather than to speak.
Therefore, I think, we should, for just a moment, pay a tribute to Sir Charles Howard for the manner in which he has performed his manifold duties. These have brought him into intimate contact not only with hon. Members, but also with the public and with the Press, and Sir Charles, during this exceptionally long period of twenty-one years, has added a most notable chapter to the great historical volume of devotion written by his distinguished predecessors.
Sir Charles had particular difficulties to grapple with during his twenty-one years. Those of us who were with him through the war will never forget the fortitude, or the spirit, or the energy with which he undertook the rehousing of the House of Commons during the war, and made improvised arrangements for us to meet elsewhere. This was one of his many services to the House and also, I believe, to the whole country and to the democratic cause everywhere. Sir Charles met all the demands we made upon him, whether reasonable or unreasonable, with a genial efficiency and kindliness which can only have sprung from a deep sense of unselfish service. This is one of those occasions when we can be uncontroversial and when we are united in a basic unity

in which we can pay a tribute without reserve.
We are sure that his great tradition will be notably sustained by his successor, General Hughes, who has become so well known and liked by us during his service as Assistant Serjeant at Arms and, later, as Deputy-Serjeant at Arms. We give him a generous welcome.
Sir Charles Howard was appointed in the warm, autumnal days of October, 1935. We now move this Motion, with gratitude, in the colder and grimmer days of January, 1957. But our hearts are warm, and we wish to express in the terms of the Motion our affectionate appreciation of his devotion and example. We hope that he and his charming lady will now enjoy long leisure, and that we shall see him back to visit us from time to time. To adopt the Miltonic line, we say:
May long retirement urge his sweet return.

Mr. Hugh Gaitskell: On behalf of the Opposition, I desire to support fully all that the Lord Privy Seal has said so eloquently about our former Serjeant at Arms. Sir Charles Howard has held this post for twenty-one years and, although the duties of the Serjeant at Arms are manifold, the one that most comes to our mind is that of sitting in this Chamber. To have to sit in this Chamber for twenty-one years listening to others speak is not a prospect that would appeal to all of us, particularly if one was not allowed to speak oneself from time to time. It is an ordeal which even you, Mr. Speaker, might find a little trying, because at least you have the opportunity to rebuke hon. Members and to intervene in various ways.
Undoubtedly, great qualities are needed to fulfil the office of Serjeant at Arms—certainly, patience and understanding are obviously indicated—and there is no doubt that Sir Charles Howard had these in abundance. We thank him for his long services to this House and for the help and kindness he has given us over the years. We hope that he will enjoy a very well deserved retirement with his wife.
May I also take this opportunity, as did the Lord Privy Seal, of welcoming his successor, General Hughes. We know him well, we have every confidence in him and we are quite satisfied that he will


prove a most worthy successor to the many distinguished predecessors in this office.

Question put and agreed to.

Resolved, nemine contradicente,
That Mr. Speaker be requested to acquaint Brigadier Sir Charles Alfred Howard, G.C.V.O., D.S.O., that this House entertains a just sense of the exemplary manner in which he has uniformly discharged the duties of the office of Serjeant at Arms, and has devoted himself to the service of the House for a period of over twenty-one years.

Orders of the Day — CUSTOMS DUTIES (DUMPING AND SUBSIDIES) BILL

Order for Second Reading read.

4.32 p.m.

The President of the Board of Trade (Sir David Eccles): I beg to move, That the Bill be now read a Second time.
It is an accident, but not without significance, that the first piece of Government business in the administration of my right hon. Friend the Prime Minister should be a measure designed to help British trade. As we begin today we mean to go on. We are asking the House to give the Board of Trade powers to place a duty upon goods dumped in this country or sent here with the artificial aid of a subsidy.
Under the Bill, we could not take action simply because the price of the goods was low. A duty would only be imposed when it could be shown that goods had been dumped or subsidised and that the entry of the goods would injure an established source of supply.
The first point to be made about the Bill is that it is not designed to protect the British market against legitimate low-cost competition. We are this afternoon concerned solely with unfair trade practices. I would say at once that the reason and sense of the Bill is that the United Kingdom could not move further towards free trade unless we were certain it was fair trade. In particular, we could not join in making a European free trade area unless we had safeguards against dumping and subsidies which were strict and within our own power to enforce.
British industry expects to be challenged by the products of European manufacturers, but, provided the competition is fair, our scientists, engineers, managers, salesmen and workpeople are confident of winning a rich reward from the expanding markets across the Channel.
In the Bill, it is proposed to deal with two methods of unfair trading. One does not need to be a tariff expert—I certainly am not one—to see how difficult it is to frame rules against dumping and subsidised exports.
Many attempts have been made in many countries to define what is a fair


market price. This is the essence of all anti-dumping legislation. The last time we tried in this country to find a solution to that problem, we failed.
In Part II of the 1921 Safeguarding of Industries Act, 1921, it was required that the cost of production should be established by an independent committee. This proved an impossible task. Accordingly, that part of the Act was judged to be useless and it was withdrawn in 1930.
We hope we have learned the lesson of that experience and, as I will show later, in this Bill, in the last resort, the Board of Trade is given discretion to determine what is a fair price.
Before I come to the Bill itself, there are one or two general observations I should like to make. I suppose that hon. Members, in all parts of the House, would agree that it is better to prevent than to cure unfair trade practices. That has always been the policy of Her Majesty's Governments. Since the war, British Governments have worked with the governments of other countries in the G.A.T.T. and in the O.E.E.C. to eliminate at the source export subsidies of one kind and another.
We have taken a leading part in those negotiations and we have had some measure of success. Clearly, it is a matter of hard self-interest for a great exporting country like ours to see that as many other nations as possible observe the rules of fair trading.
Among these international rules, recognised by nations with whom we do 80 per cent. of our trade, is Article VI of the G.A.T.T., which lays down what action may be taken against dumping and export subsidies. This is a useful article as far as it goes and we have had regard to the limitations which it imposes on antidumping and countervailing duties in drafting the Clauses of our Bill.
The fact is that at present we have no powers to do what the G.A.T.T. allows us to do. That is really the main reason why it is necessary to bring forward this Bill. It is, naturally, our intention to use the powers in the Bill, if Parliament gives them to us, against fellow members of the G.A.T.T. only in accordance with the obligations which we have assumed towards them.
The House will notice that the present Bill—

Mr. Percy Collick: Will the Minister give an example of the point he is now making?

Sir D. Eccles: Of an example of the use of the power?

Mr. Collick: Yes.

Sir D. Eccles: It is difficult. I am not quite sure what the hon. Member means. Does he want an example of dumping?

Mr. Collick: In operating the Article of G.A.T.T., to which he has referred, does the Minister have a firm example of goods that he would prohibit?

Sir D. Eccles: I suppose that if, say, at the end of the season, a foreign firm started to dump in this market fashion goods which it had failed to sell in its own market, it would be reasonable to consider putting on an anti-dumping duty. I hope that is the kind of example that the hon. Member wanted.
The present Bill goes rather wider than Article VI of the G.A.T.T., for the good reason that not all the countries with whom we trade and with whom we hope to expand our trade are members of that organisation. For example, Communist countries are outside the G.A.T.T. and, by the very nature of their economic system, they can fix what export prices they choose. It might be that political considerations are uppermost in their minds. One argument—and I think it a strong argument—for this Bill is that we have at present no deterrent against economic aggression by totalitarian methods which leave a free trader without any defence. I should have thought that Liberals would have seen the force of that contention, but I am told that there are people who, by some abstract principle, welcome imports from any quarter at any price. I must say I disagree with that extreme Free Trade doctrine.
Certainly we should go out of our way to stimulate fair and vigorous competition, because it keeps down prices and keeps standards rising, but we must remember, also, that the consumer has a real and permanent interest in maintaining steady sources of supply. The consumer is not served if our market is disrupted by ruthless and unpredictable sales below cost. Such sales could cause


lasting damage. Skilled workers once lost might never be recovered. The confidence that is required for programmes of research and expansion might disappear. The progressive efficiency of an industry if often unthinkable without some prospect of stability in turnover and earnings. Having said that, perhaps I should again reassure the hon. Member who represents the Liberal Party that this Bill cannot protect anyone from legitimate competition no matter how low cost it is. Its one and only object is to confound those who make unfair attacks upon our established sources of supply.
It will be seen that the powers in the Bill are permissive. They are not mandatory; they are not automatic since a duty is only to be imposed when it has been judged to be in the national interest to do so. We have found that industry generally agrees with this approach because it believes, as we do, that the chief function of the powers in this Bill would be to act as a deterrent. It might be alleged that to pass this legislation would be to encourage other countries, our competitors, to do the same. To that the answer is that most Commonwealth countries, the United States of America and many foreign countries already have similar powers and have made use of them. We are seeking this afternoon to put ourselves where our main competitors are already.
We have told the Commonwealth countries, of course, why we are bringing forward this Bill. We have given them an assurance that we would consult them first before imposing a duty upon their goods. While I am mentioning the Commonwealth, there is one matter to which I should like to draw the attention of hon. Members. It is that the Bill, like Article VI of the G.A.T.T., would allow us to impose a duty when the entry of the goods concerned caused damage to a source of supply outside the United Kingdom. For example, sales of subsidised foodstuffs might be made here. They might cause serious injury only to British farmers, but they might also cause injury to Commonwealth farmers and, perhaps in some cases, only to Commonwealth farmers. We should be able to consider a countervailing duty in such a case. We should hope, of course,

that Commonwealth countries in similar circumstances would take action to protect British manufacturers from unfair competition in their markets.

Mr. H. Rhodes: Would the Minister apply that principle to imports from Hong Kong? This is not a catch question; I would not ask one in these circumstances. How shall we stand with reference to imports from Hong Kong processed in this country and then exported to other countries in the common market? Does the principle the right hon. Gentleman has enunciated with regard to agriculture in the Commonwealth apply to imports of manufactures from Hong Kong?

Sir D. Eccles: In order to apply the Bill to Hong Kong it would be necessary to prove that the export price from Hong Kong was unfair; in other words, that there was an element either of subsidy or of selling below cost of production. This Bill is not concerned to put on a duty against low cost goods from Hong Kong or anywhere else except where the price at which they are sold contains an unfair element.

Mr. Rhodes: The Minister has got the point wrongly; it may be because I was clumsy in explaining it. There are processors in this country who are looking forward to entry into the European free trade area so that they can buy goods from Hong Kong, process them in this country, and have an advantage over European manufacturers by releasing them into that market. Will the right hon. Gentleman explain whether the principle he has enunciated with regard to agriculture applies to that?

Sir D. Eccles: This Bill has nothing to do with the case raised by the hon. Member. I quite understand the case he has raised. That will depend on the outcome of the agreements, if we are able to make them—they are going to be very difficult to make—for the association of this country with the European free trade market. Certainly one hopes there will be general expansion of trade all round, but that has nothing to do with this Bill. This Bill could not in any circumstances be used, as I imagine the hon. Member would like it to be used, to prevent the re-export of goods, reaching this country from Hong Kong, to Europe.

Mr. Rhodes: If the right hon. Gentleman will excuse me, I would point out that Clause 1 of the Bill says:
…the export of materials from any country so as to favour producers in that country who use those materials in goods produced by them.

Sir D. Eccles: The hon. Member is wrong; the point he makes is not covered by this Bill. This is a very technical matter and we had better have a talk about it afterwards. It is a fact that some of these Clauses are technical and will need a lot of explanation. Probably the best place for that explanation will be the Committee stage. My right hon. and learned Friend the Minister of State is to answer questions raised in the debate. If the hon. Member for Ashton-under-Lyne (Mr. Rhodes) has the good fortune to catch Mr. Speaker's eye, perhaps he will elaborate the point he wishes to make and will then be able to obtain an answer. I think the House would probably like to know how we think the Bill would work and, as we see it, what would actually happen.

Mr. Glenvil Hall: Before the right hon. Gentleman passes from this part of his exposition, I think he has said that the Commonwealth countries have been informed that this Bill was to be promoted. I wonder if he could tell us whether any of them objected to it?

Sir D. Eccles: They have not objected. The majority already have the same powers, or more or less the same powers.

Mr. Hall: Has India objected?

Sir D. Eccles: Not that I know of.
This is what would happen. Someone would lodge a complaint with the Board of Trade that goods were being imported at unfair prices and were likely to injure one of our sources of supply. I should add that the Board could take the initiative itself under this Bill. I doubt if it would do it very often, but it could. However the process was started, the Board would urgently consider whether a prima facie case had been made out.
Once we were satisfied there was such a case we could either proceed to a detailed examination, or in the exceptional case, where it was perfectly clear that serious damage was being done, lay an Order at once, subject to an affirmative Resolution of this House, imposing a

duty. In the second type of case, where emergency action was clearly imperative, the examination in detail would be made as soon as possible to determine whether any re-adjustment was required. Clause 3 provides that duty may be repaid in either set of circumstances to the extent which it was found we had over-estimated the margin of dumping on a particular consignment. The reason for this provision is that we are bound by Article VI of the G.A.T.T. in respect of goods originating in the member-countries to limit the duty to the margin of dumping.
Clause 4 gives power to allow a drawback of duty on goods which are re-exported. There are arguments for and against that, but, on balance, I think it is right to ask for this power.
The next four Clauses are concerned with the operation of Orders once they are made and with the definitions of "fair market price", "export price" and "country of origin". It is here that the Bill is notably better than the 1921 Safeguarding of Industries Act. In that Act there was room for too much argument about the actual cost of production.
In our Bill, we lay down alternative criteria for the ascertainment of the fair market price in the country of origin. In the last resort, the Board of Trade is given power in Clause 7 to estimate the fair market price by reference to such figures as they can get on the cost of production, plus such additions as they think proper for selling cost and profit.
I see no other way to protect ourselves against dumping from countries who do not practise the normal rules of profit and loss. Hon. Members opposite may like to reflect that the more monopolistic and Socialist is the system of trading the easier it is for a Government to injure its competitors overseas by the device of unfair methods of export. In this country, we shall, from time to time, have to make judgments about fair market prices, and I am clear that the responsibility for making such judgments is better placed squarely on the President of the Board of Trade, who is directly accountable to Parliament, rather than to pass the job to an outside body of business experts. The experience of the 1921 Act strongly supports this view.
The Board of Trade will scrutinise carefully every allegation of dumping or subsidy. We shall not act precipitately.


On the other hand, unless we have in reserve the power to act promptly we might as well not introduce a Bill at all. In deciding whether to act, I should always consider the interest of exporters. They should not be deprived of an opportunity, other than in the most exceptional circumstances, of buying a raw material as cheaply as it can be bought by their competitors.
Finally, may I repeat that if this Bill were really successful we should not have to use the powers. The deterrent should keep the peace. Indeed, I feel as if I were asking the House for permission to put up a notice, "Beware of the Dog: He Bites Dumpers and Subsidisers."
Now that we are anxious both to extend our trade with countries which are not members of G.A.T.T., and are about to join in pulling European tariffs down to zero, we need this warning against unfair practices. For these reasons, I hope the House will give us this small but useful Bill.

4.57 p.m.

Mr. Gordon Walker: I should like to congratulate the right hon. Gentleman the President of the Board of Trade on his maiden speech in his new office. I have a feeling that he will probably feel happier in his new office than he did in his old one. Certainly he has very quickly mastered a complex brief on what is not a very major Bill but which none the less is a very difficult and complicated one, on which for that reason we will have to have our main debates during the Committee stage.
I should like to make it clear that, on this side of the House, we in general support the Bill, but we approach some of its details with a good deal of caution, not to say suspicion. There is a good case for taking powers to act against genuine dumping. It is a case quite distinct from anything to do with a European free trade area. Indeed, for reasons which I will give in a moment, I am rather sorry that the Bill has been associated with the European free trade area.
The reason it is right to take this power is that practically every other country in the world has it—practically all the Commonwealth countries—Australia, Canada, India, South Africa and New Zealand—and also the major foreign

trading countries, such as France, Germany and the United States. In this sort of matter, as in others, unilateral disarmament is not a very wise policy. I cannot accept the full Liberal free trade argument, for that reason; though I could never understand why people who believe in private enterprise are not complete free traders. There must be some reason for it which has escaped my notice.
I agree with my Liberal friends that we must be very careful in this Bill not to open the door to protection being smuggled in under the disguise of antidumping measures. Therefore, the first question, we have to ask about the Bill is whether its definition of dumping is right, whether the definition is precise enough to limit to genuine dumping the target at which we are aiming. I must say that, as I read the Bill, I have some doubts on that score. The right hon. Gentleman has said that it is not an easy matter to define dumping. Like the elephant, it is easier to recognise than to define.
The Government have taken as their basic definition the definition in Clause 6 of G.A.T.T., which says in effect that dumping is exporting at prices below the fair home market price. Since this definition is in G.A.T.T., it is, I suppose, inevitable that it must be used in the Bill. But it is none the less very defective as a definition. The truth is that many of the world's exports, including very many of ours, are in fact exported at a cheaper price than is prevailing at home.
The sound economic reason for that is that exports in the main, or very often, are marginal additions to the production for the home market. As the overheads fall mainly on the production for the home market, they automatically fall less on the marginal production for exports. Therefore, it is cheaper to produce for export. The unit cost for export is cheaper than the unit cost for the home market and, therefore, it is proper to sell exports cheaper than the same goods sold in the home market.
This is a very widespread and, on economic grounds, a justifiable practice, and yet this widespread practice is dumping under the terms of the Bill, and, indeed, under the terms of G.A.T.T.

Mr. Gerald Nabarro: If the right hon. Gentleman's argument is not to appear disingenuous, he should surely say that in certain classic cases exports from the United Kingdom are sold at a premium as compared with the home market—for example, coal.

Mr. Gordon Walker: I was going to mention that in a different part of my argument.
The Bill's definition does not really meet what everybody means by genuine dumping. By genuine dumping we mean unloading surplus stocks at throw-away prices or subsidies designed to export unemployment from the country concerned. These things are very harmful to an economy. They disrupt industries, spread unemployment and give no corresponding benefit to the nation. These things ought to be stopped because they are harmful. But there is no logical or statutory distinction between that sort of genuine dumping and the perfectly normal trading practice of practically the whole world.

Mr. Arthur Holt: I should like to make one brief point about the dumping about which the right hon. Gentleman says people are talking—surpluses at give-away prices. I appreciate that this is a difficult point, but if the goods are not to be sold somewhere, will the right hon. Gentleman say what is to be done with them? When coffee was burnt in Brazil, the Labour Party made a hullabaloo about it.

Mr. Gordon Walker: I do not think that the coffee was burnt because it was being sold for a lower price than was being charged on the Brazilian market. I think that what the hon. Gentleman says refers more to United States surplus stocks; and I will come to that in a moment.
What we must recognise is that, in practice, we have to give up the attempt to define dumping. What the Bill does in the end is very simply to say that, subject to Resolutions of the House, dumping is whatever the Board of Trade says it is. That is what it boils down to. The Bill provides a certain number of signposts and rules to direct the President in his decisions about what dumping really is.
Some of these powers are, I think, too wide. The Bill is riddled with discretionary powers which make nonsense of the main provisions which appear at the beginning of a Bill. By the time one gets to the end all the provisions in the first Clauses have been destroyed by the provisions giving the Board of Trade power to assume this and that and leave this and that out of account. Most of the matters on which the powers in the Bill are too wide must be dealt with during the Committee stage, but there is one general point I should like to make about the question of the very wide powers in the Bill.
I think that these very wide powers are dangerous because, if discretion exists, it renders the Board of. Trade subject to pressures from all sorts of vested and special interests and it is harder to resist those pressures if the Bill is full of loopholes. Whatever the President may say, he could keep out low cost imports even if they were not dumping because he has so many powers to decide what the cost of production is in a given foreign country, and so forth.
In this connection, I find the timing of the Bill somewhat alarming as I do also the right hon. Gentleman's references in connection with it to the possible entry of this country into the European free trade area. It has been very widely said that this Measure is a quid pro quo to certain industrial interests in this country for our entry into the European free trade area. Fears have been aroused, partly by the timing of the Bill, that the rigours of competition in such a free trade area would be softened by smuggling in protection dressed up as anti-dumping. That would, as the right hon. Gentleman himself said, be fatal. We cannot enter the European free trade area with all sorts of restrictions and special powers and provisions. We must go into it honestly or not at all. We must rely on its own machinery, in the control of which we would, of course, share to stop dumping.
I noticed that the right hon. Gentleman said, and I welcome it, that there would be no duties under the Bill to check imports just because they were cheap, that we want low-cost imports. They are certainly in the national interest, but I do not know that I agree with the right hon. Gentleman when he says that there


are no such powers in the Bill. I hope that the right, hon. Gentleman's strong statement to the effect that there is no intention to stop low-cost imports, except when they are dumping in the genuine form, will lead him to co-operate with us in Committee in inserting Amendments to make that clear where it is not clear at the moment.
Apart from these very wide powers there are one or two points where the Bill is, perhaps, too narrow. There are some deviations in it from the definition of dumping as set out in Article VI of G.A.T.T., and in particular paragraph (6, a) of that Article which is the one dealing with dumping. These are the important words:
No contracting party shall levy any antidumping or countervailing duty … unless it determines that the effect … is such as to cause or threaten material injury to an established domestic industry.
Although I have searched the Bill, I cannot find that anywhere in the definition of dumping, and I cannot see that by leaving it out we are helping ourselves in trading with Iron Curtain countries.
The right hon. Gentleman said that we departed from the definition in G.A.T.T. for that reason, but it seems to me that it is an essential part to genuine dumping that it should do harm to an established industry. It would be wiser to put this vital and integral part about dumping in the G.A.T.T. Agreement into the Bill in order to make it even clearer that it is genuine dumping and not mere low-cost imports that we want to guard against.
There is another matter dealing with this G.A.T.T. Article. The point has some Commonwealth significance and was referred to by the right hon. Gentleman. Indeed, he said this was in the Bill. It is, namely, the power to authorise countervailing duties to offset dumping which may not harm an industry in our country, but may harm an industry in another country. For instance, if United States surplus stocks were unloaded in this country that might not hurt our exporting industries, but might hurt Canadian and Australian exports to us.
The right hon. Gentleman said that there are powers in the Bill to do that. I have searched the Bill, but I cannot find any such powers in it. It is possible that

they are there by implication, so to speak, in which case I think it would be better to put them into the Bill straightforwardly and openly. I hope there will be no objection to such powers being written into the Bill because this is a matter of considerable Commonwealth importance. I hope that if these powers in fact exist, as the right hon. Gentleman says they do, they will be used.
For instance, I hope that it will be the Government's intention to put on duties against dumped United States surplus stocks that might otherwise harm Canadian, Australian or other Commonwealth exporters to this country; and also to help to guard against the dumping of wheat, for instance, from the Argentine or France, about which Australia is very apprehensive, as it would undermine her market for that commodity in this country. I hope that the right hon. Gentleman will give an assurance that, if he can find these powers in the Bill—and I am prepared to listen to him on that, and perhaps discover them with him—they will be used.
A number of industries are very concerned with the Bill and hon. Friends of mine will raise a good many points in connection with particular industries. The chief is the cotton textile industry, an industry that will be disappointed by the Bill because one of the things about which it is most concerned—the practice followed by India of putting a charge on the export of raw cotton which, of course, gives an advantage to the home producer—is specifically excluded from the definition of dumping. That practice is excluded from the scope of the Bill by Clause 7 (4). The reason is obvious. It is that, as the hon. Member for Kidderminster (Mr. Nabarro) has pointed out, we ourselves do exactly the same thing in regard to steel and coal.
I think that the only way in which the cotton industry could be helped in its troubles would be by State purchase of yarn and piecegoods as is done with jute. It always seems to me that the Government's refusal to do anything along those lines to help the cotton industry is quite untenable when it is remembered that they do exactly this in respect of jute, and in this respect there is really no difference that I can see, in principle or otherwise, between jute and cotton.
There are many other industries that might be concerned with the operation of the Bill, and I want to echo what was said by my hon. Friend the Member for Birkenhead (Mr. Collick). It would help those industries, and the House, to have some clear idea of the Government's actual intentions. Is there going on at present dumping or the subsidising of exports which this Bill could be used to stop? Are the Government introducing this Measure because they have a number of cases with which they immediately want to deal? Do they want to take action in some of these fields? Are there things that they would do today if the Bill were already law? It was about that sort of thing that my hon. Friend was asking the President of the Board of Trade who, if he does not mind my saying so, was being rather obtuse. That is the real point we want to get at.
There is one specific question concerning the United States' surplus stocks. These are disposed of now at a price lower than that obtaining on the American home market. That is dumping, absolutely plumb and full within the meaning of this Bill. Those stocks come absolutely openly and clearly within the term of dumping as defined here. Is it, or is it not, the Government's intention to operate the Bill in this very clear case? We ought to be given some answers to such practical questions before we can make up our minds on the merits of the detail of the Bill.
As I think my speech has made clear, we give the Measure rather qualified support. We do not think it a major Measure. We certainly do not regard it as a substitute for the real planning of our international trade by such means as bulk purchase of Commonwealth products. There will be many very detailed matters which we shall want to scrutinise closely in Committee, but we are not against the principle of the Bill. We have to arm ourselves against genuine dumping—we cannot be the only trading nation without such powers—and I join with the right hon. Gentleman in hoping that the mere possession of these powers will make it unnecessary for us often to use them. We must reserve our full rights in Committee—we have many doubts about some of the details of the Bill—but, because we do not quarrel with the principle of the Bill, which is all we are debating now, I

would advise my hon. Friends not to divide on its Second Reading.

5.15 p.m.

Mr. Richard Fort: In welcoming this essentially minor Measure—though it is, perhaps, rather more important than was suggested by the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker)—I do so principally as one who, for the general welfare of our country, welcomes the Government's policy with regard to the free trade area in Europe. It is no good overlooking the fact that, in discussions about this policy throughout industry, many are uncertain and doubtful how it will affect their own industries.
I believe that the importance of this Bill is to give confidence to those who have legitimate fears and worries about the future as the European free trade policy is introduced. If I understand it aright, having heard my right hon. Friend's amplification, the Bill will remove one of the most important of the anxieties that other countries may well take advantage of the lower tariffs to dispose of goods here at prices much lower than can be obtained in the various home markets.
If properly operated by the Board of Trade, this Bill should act as a deterrent to countries which have a long tradition of doing that sort of thing. Although it is extremely difficult to get exact figures, we all know that at the present time a good many European countries are selling here for finishing grey cloth, both rayon and cotton, a good deal more cheaply than their own finishers are buying at in their own home markets. The same applies to yarn. Although representations have been made to the Board of Trade, it has been difficult to press the argument home under present legislation and regulations because of the difficulty of getting exact facts—a point brought out by my right hon. Friend when he was discussing the shortcomings of earlier legislation.
It is to be hoped that the very wide expression appearing in Clause 1:
Where it appears to the Board of Trade … that … it would be in the national interest …
will mean that it will be possible for the Board of Trade to take action which it cannot at present take. My right hon.


Friend has removed one of the difficulties which I foresaw; namely, the slowness with which the Measure might operate if the Board of Trade did not intend to put teeth into it. As I understand it, it will be possible, as soon as the Board has found a prima facie case, to issue an Order for the new duty to be imposed, and if, subsequently, the House rejects the Order, then, by Clause 3, the additional duty would be repaid. But, as the Bill is drafted, prompt action could be taken in order to prevent importers bringing in large quantities of goods while we here are discussing the matter; otherwise, the intention of the Act could in that way be negatived.
I should be glad if some further explanation could be given as regards the latter part of Clause 1 and as regards Clause 7 (4), two provisions to which the right hon. Gentleman the Member for Smethwick drew attention. I should like to be assured that goods which incorporate raw materials subsidised in other countries will come under the definition required for the anti-dumping provisions to operate. There is an unhappy outlook for some of our trades because certain European countries with colonial possessions are allowing those colonial possessions to sell their raw materials at prices considerably below world prices to the processing mother country. I know that the danger here is retaliation over our own activities in connection with steel and steel products; but I should like there to be rather wider discussion on this point than we have so far had. It is undoubtedly a very serious matter as regards products from the colonial territories of certain European countries.

Mr. Nabarro: My hon. Friend and I have closely allied interests, he with cotton and I with carpets, and I hope he will permit me to say a word here. He should add to his description of the activities of these colonial territories the payment of an acreage subsidy for increasing crops, since that affects the ultimate market price and is, in effect, a means of granting an export subsidy on the finished manufactured article.

Mr. Fort: My hon. Friend has given us yet another example of the subtleties about which the Board of Trade have to

learn, if it does not know about them already, in enforcing this Measure.
I should be glad if we could be given a clearer idea as regards the machinery to be operated by the Board of Trade in enforcing this Bill when it becomes an Act. We know that in the first place the Board will rely on complaints from industries here. Will it increase the number of people working in its own Department, or in contact with embassies abroad, to collect information about the subsidy arrangements in other countries and the home prices being paid in those countries in order that it may have the necessary evidence to establish the prima facie case which must be established before the Bill can come into force? Perhaps my right hon. and learned Friend will say something about the methods of enforcement.
With those comments, some of them on Committee points but some of them relating to matters of rather wider importance, I welcome the Bill. I am very glad indeed to see that the first Measure introduced by the new Administration is one which is an integral part of our effort to encourage freer and more prosperous trade for our country.

5.24 p.m.

Mr. H. Rhodes: May I congratulate the Minister on his accession to the Board of Trade? I never thought he was really very comfortable at the Ministry of Education. We welcome him, I hope for a short time, at any rate, to the Board of Trade as Minister. I remember the exhortations he used to give us on the subject of incentives; he was very strong on the subject of "the stick and the carrot", and I hope he will practise some of the principles he advanced when he was on these benches.
If I had been in a position yesterday to vote for a Dumping Bill, I would have voted for it. At the risk of being out of order, I will mention why. Last week I had quotations for a commodity from several firms. As near as can be, those quotations were all alike. Those firms had all said they had got to add on 10 per cent. because their association said so. That type of hindrance to trade is more important than this Bill.
We all look at this Bill through different eyes, considering how it will affect us personally. Nations do the same. According to the state of trade,


so our views alter. If a nation overseas cannot get enough of a certain commodity, whether it be consumer goods or capital goods, and if it is charged more than the home price by the exporter, that nation grumbles and says it is being discriminated against. Take the example of Canada's attitude on the price of cotton yarns in 1949. The same thing could apply, of course, with regard to coal. There is a higher price overseas and a lower price at home; overseas there is grumbling at discrimination because people are not able to get it cheap enough.
But let trade alter, let there be a buyer's market, and at once sections of industry begin to run the line that they are being hard hit. We have had examples of that during the last six or twelve months; we had a short period in 1952 when there was quite a lot of propaganda put out about the difficulties of a particular industry.
We must take a balanced view on all these things or we shall be running to and fro with different arguments every week. Private industry, when it is doing well, likes to be left alone. But as soon as industries get into difficulty, they come running to the Board of Trade and expect the Board of Trade to do something about it overnight.
There are certain practices about which we know already. Let me take the example of the textile manufacturers in Italy whose work is done in the vicinity of Florence. Manufacturers in places like Prato have edged away from the factory system as we know it and have gone back to the homework system as it was known here a hundred years ago. As a result, those manufacturers are evading taxation.
Welfare taxation in Italy is imposed directly on manufacturers on the assumption that the manufacturer responsible for the wages he pays to his operatives should pay the tax over to the State. If a manufacturer in Italy can prove that his employees are self-employed, he can evade taxation. He can prove that very neatly by letting out the machines at a peppercorn rent or by sending out to people's homes the materials for manufacture. He evades taxation in that way, and to that extent the goods come into this country at a lower price. It is quite considerable. The taxation levied on the manufacturers

of Italy is almost the mount of the wages. I will not pursue that one any further.
Let us go to France. Some little time ago the French instituted welfare taxation with the prime object of increasing the population. They levied taxation on manufacturers. It has been a bone of contention all over Europe that the French manufacturers of yarn have been working at a tremendous advantage to themselves because they get a remission of the welfare taxation for every pound of yarn that they export. Does that come under the Bill?
Let us go to Egypt, which is an exporter of cotton. Egypt exported cotton against armaments from Russia in considerable amounts last year. Russia offered that cotton to European countries at not much more than three quarters of the market price that had been charged to Russia by Egypt. Does that constitute an infringement of what the Government are trying to do in the Bill?
Let us go to India. There is no provision in the Bill for the protection of the British manufacturer against the action of the Indian Government in allowing the Indian manufacturer to get his cotton at a cheaper price. Why not? I do not think the Commonwealth would object. Now is the opportunity to get it in. When the disparity existed American cotton was 32d. per 1b. and Indian cotton was 24d. per 1b. and it would have caused a tremendous upheaval in the Commonwealth, but it would not do so today. I am surprised that the Government have not put this into the Bill. Why be shy about it? Why not have a go at it and put it in?
The price of American cotton and the way in which the cotton has been marketed over the last six to twelve months has also given rise to disquiet, but it is not so important now.
If the Government are aiming this legislation at certain types of practice, they must define them a little more closely. We all ought to be aware that the competition from places like Hong Kong and Japan does not come under the Bill. The "fair market price" consideration comes into it. I have no doubt that manufacturers in Hong Kong and Japan are making a normal profit on the prices at which they have sold their products throughout the year. A lot of people in


this country think that we can by legislation indefinitely keep out consumer goods from countries that can make them more cheaply than ourselves. We cannot.
Competition from other lower-wage countries or countries with a lower standard of living than ourselves is inherent in our economic system. If it does not hit us in one day and generation it hits somebody else, and if it is not hitting one industry it is hitting another. The difficulty of the textile industry today may be the difficulty of light engineering, engineering or some other industry in another generation. It is a great mistake for any industry to think it can protect itself by this kind of legislation against all competition coming in from abroad. It cannot do it. It must set its own house in order.
One of the great mistakes, for instance, that the cotton industry made immediately after the war was in thinking that there would be a safeguard for the home trade. Whilst it had that in its mind there was an effort on the part of many people in the industry to make sure that their share of the home trade would be there when difficulties arose. Instead of going out for exports as far as they could, they were leaning towards the home market in the hope that legislation would be brought in to safeguard the trade when difficulties arose.
My right hon. Friend the Member for Smethwick (Mr. Gordon Walker) referred to the powers given to the President of the Board of Trade. I think that the Department will have great difficulty in using this legislation at all, and I ask the right hon. Gentleman to consider appointing a panel consisting of the best brains in a group of industries: the textile, rayon, terylene and nylon sections are all affected in some way or another. They may all be subject to competition at some time. I would include also the wool and carpet industries. Let them pool their knowledge on these matters for the benefit of the right hon. Gentleman.
My right hon. Friend also mentioned the remarks made by the President of the Board of Trade about previous legislation. I think he mentioned 1921, and said that the cost of production was not a suitable medium. Surely he is doing that in Clause 8. I would like the Government to look at this point again,

because in that Clause they are defining a percentage of the cost of production. Processes which can be put on commodities can vary the price and the quality, making them cheaper or dearer. That makes the assessment quite difficult to carry out.

The Minister of State, Board of Trade (Mr. Derek Walker-Smith): My right hon. Friend was referring in this context to the difference between the cost of production as a criterion in the 1921 Act, and the definition of the ascertainment of fair market price in Clause 7 of this Bill. He was not there on the point of Clause 8. He was dealing with the fact that we have much more flexible criteria which should make the whole machinery of the Measure easier to operate.

Mr. Rhodes: I thank the right hon. and learned Gentleman for the correction. I accept it.
In Clause 8 the test is by percentage of cost of production. My view is that the Board of Trade should have more flexibility than this, because I think that the cost of a commodity should be estimated for this purpose by the cost of the processes rather than just by a percentage of the whole cost of production.
As to our entry into the European free trade area, there is much to be done before we can go into it. There is the matter of the import of cheap cotton textiles from Hong Kong, which I mentioned before, and which is not my argument, but one which has been stressed very often by the Textiles Committee of the O.E.E.C. I would ask the President to examine it, because that will cause him more anxiety than anything else that has cropped up in all the negotiations so far. He will find it referred to on several occasions. That is one of the difficulties he will come up against in operating Clause 4, which provides for a remission of tax paid on imported goods liable to the dumping duty.
Our entry into the free trade area of Europe, I suppose, needs some guarantees. I have mentioned a few, and I hope that before we come to the end of our consideration of the Bill we shall be given by the Government a clearer idea of what they intend to do.

5.43 p.m.

Sir John Barlow: I am glad to follow the hon. Member for Ashton-under-Lyne (Mr. Rhodes) because he speaks with considerable knowledge of the textile industry. He admitted that on one or two occasions he was near to being out of order. I think he started so many hares in respect of which he may have been out of order that I do not propose to chase them, but I would ask my right hon. Friend to look most carefully into the matter of cotton prices.
There was very serious hardship a few years ago when the American price of cotton was relatively high artificially compared with the Indian price, which was low artificially. This country suffered very considerably from Indian competition. As the hon. Member for Ashton-under-Lyne pointed out, if this country had taken drastic action at that time there would have been very considerable international feeling. There is an opportunity now which should be taken to prevent such circumstances arising in the future.
I think that we all welcome the Bill. It is bound to be controversial, though in a small way rather than a large way. We in industry have all suffered in various degrees from dumping in the past. When I say industry I mean labour, capital, management, and everyone. I think it is only those who have had real experience of it who know how devastating it can be to all the different people engaged in industry.
This country is probably one of the most sought after markets in the world, owing to our high standard of living and our comparatively high values. I cannot think readily of any market outside the dollar market which is more popular and more sought after than the British market. For that reason, we are extremely vulnerable, and we should take suitable measures to see we do not unduly suffer on that account.
This Bill is a permissive one. It does not go nearly so far as legislation imposed by members of the Commonwealth, for example. Canadian, South African and, I believe, Australian measures go very much further than this.
I suggest to my right hon. Friend that if he wants a Bill which is to be largely

a deterrent, and does not want a large number of Orders, it must be a strong Bill which can be easily and quickly effective, and which can be seen to be easily and quickly effective, otherwise people wishing to dump into this country will not take it seriously. The stronger the Bill is, the less likely it will be that we shall have to use frequently the powers conferred by it.
Those of us who have had experience of dumping will, I think, agree that it falls into three separate categories. One is the regular dumping. A manufacturer abroad sees a good market here and plans his production to dump regularly part of that production to his benefit and to the detriment of manufacturers of that commodity in this country. Then there is the intermittent, sporadic dumping, which occurs once in a while. It is not regular, and is not so organised.
Then there is the dumping of temporary surpluses, of which my right hon. Friend gave one example. It is very often the unexpected surplus of some large production which cannot be consumed at home. The manufacturers look around the world to see what markets there are in which they can dump their surplus most easily. Measures to prevent dumping of these three different types may require rather different methods, and I suggest to my right hon. Friend that he will have to be careful that the Bill is capable of meeting those different circumstances which may arise.
It would appear that under the Bill, as far as one can understand it, the initiative is taken by somebody in this country who has suffered because dumping has taken place. He reports it to the Board of Trade; the Board of Trade looks into it to see whether a prima facie case is proved. If so, then presumably the complainant, whether an individual manufacturer or an association of manufacturers, will be put to a great deal of time and trouble and expense in providing information for the Board of Trade to show whether a duty should be imposed.
The Minister has not told us how he proposes to deal with that problem. There might be a large number of applications which might almost embarrass the Board of Trade, and that is saying a great deal, because it is never easily embarrassed. The Board of Trade would


not want too many applications. It would want a reasonable number so that a case law could be provided. It is important that whoever winds up the debate should indicate quite clearly how all this is likely to work, otherwise there might be objections to the Bill because of hon. Members not seeing clearly the different steps that will be taken to implement the Measure.
The Bill provides that the export price is to be compared with the home price in the country of origin of the goods. I should be glad if the Minister would be more specific in his information on that point. Is he referring to the price in the factory, the f.o.b. price, the c.i.f. price, or some other figure? One knows the difficulty of taking any price and proving whether there has been subsidy at any stage or not—in the raw material, in the labour element, in the packing element, in the shipping element, or in the financing element.
Only those who have tried to prove such cases in the past realise how difficult that can be. In the textile industry, for example, before the war, similar information was sought on production in Japan, and more recently information has been sought from behind the Iron Curtain. It is known to be extremely difficult to obtain accurate information. I hope that the Minister will tell us, when he winds up the debate, how he proposes to deal with that problem.
The Bill rightly mentions the question of the national interest. Could we have some clearer definition of "the national interest"? Is the Minister thinking of industrial interest or political interest or both? One of these may change from time to time. I feel sure that in a matter of this kind it is desirable to have a lasting, agreed type of national interest as far as possible, otherwise matters will become very confused. So far as we can understand the Bill at present, I suggest that the methods adopted to prove a case are likely to take too long and are too cumbersome. I can see the Minister getting into very great trouble, even with all the advice that is readily available to him on whether something is or is not a subsidy.
My right hon. Friend might consider the possibility of having an advisory

committee composed of representatives of industry and his own advisers to work on these matters whilst he retains the ultimate authority as to whether he accepts that advice or not. We have seen that system work excellently in other directions. It might be of great help and a protection to him if he adopted something similar in this case. My right hon. Friend might also tell us whether there is an appeal beyond him. I assume that there is not. Many of these matters, obviously will be the subject of much greater discussion in Committee, but we all recognise the great necessity for a Bill of this kind. While some of us would like to improve it, we wish it well in its passage through the House.

5.56 p m

Mr. Ernest Thornton: I am glad to have the opportunity of following the hon. Member for Middleton and Prestwich (Sir J. Barlow), because I should like to offer him a definition of the national interest according to the present Chancellor of the Exchequer when he was President of the Board of Trade. That right hon. Gentleman's definition of the national interest, in the context of this Bill and in relation to his attitude towards one industry, is that the national interest would be served by any industry except the cotton textile industry of Lancashire. That is the treatment which we in Lancashire have had from the present Chancellor of the Exchequer.
It appears to me that the Bill is designed to afford the President of the Board of Trade the opportunity of protecting any industry in the country against dumping at present, except the cotton textile industry, which is the only one in the world today that is faced seriously with this problem of dual pricing that, as the hon. Member for Middleton and Prestwich pointed out, was a problem which at one time was a very serious factor in the cotton industry.
At the beginning of 1955 the difference in price enjoyed by Indian manufacturers over manufacturers in this country was 15d. per 1b. At four yards of cloth to the pound of raw cotton that represented 3¾d. per yard, which was about the total wage cost of transforming a pound of cotton into four yards of cloth. That is a situation with which no industry, however efficient, can cope. I am not justifying the cotton


textile industry in every respect. A great deal that ought to have been done has not been done, but our best mills are as efficient as any in the world and our best mills could not compete with competition of that kind, which was in effect a concealed export subsidy. As a result, our industry has had an extremely difficult time.
I am disappointed to find that the Bill's definition of dumping excludes that part of G.A.T.T.'s definition which refers to serious injury to an industry. I think we can claim that serious injury has been inflicted on the cotton textile industry in this country as a result of the practices to which I have referred. The fact that in the last five years the number of people employed in the industry has declined by 70,000 reveals a very serious situation. The labour force in the industry has shrunk by one-fifth in five years. I would remind my engineering friends in Coventry, who are concerned about the motor car industry, that they would feel very severely aggrieved if they had experienced such a loss of manpower in the industry as 70,000 over that period.
I am not suggesting for a moment that Bills of this kind should be designed with the idea of attempting to maintain industry in a static condition. We are living in a changing world. The pattern of trade has changed, the size of industries changes. Some industries must expand and some must contract. Yet we should be without a sense of responsibility if we did not pay some regard to the rate of contraction, because a rate of contraction such as has been experienced in the textile industry of Lancashire in the last few years has caused considerable dislocation, considerable disturbance of civic government, and the depopulation of some of our towns, with an increase in the rating burdens on their populations. Those factors should not be ignored but, unfortunately, this Bill makes no provision for assistance in that direction.
Neither does this Measure refer to the problem of cheap labour and allied matters. I know how difficult is the problem of the increasing industrialisation in countries of the East which have low standards of living, and I appreciate its impact on the industries of those countries of the West with higher standards of

living. That, however, is a serious problem which the West must face in the not distant future.
I believe that in recent years the Board of Trade and hon. Members on both sides of the House have thought too much of the future of this country in terms of more and more concentration upon the production of capital goods and equipment. I believe that such development is important, inevitable and desirable, but I also believe that too much emphasis has been placed on that aspect of development.
I would call the attention of hon. Members on both sides of the House to an article—if they have not already read it—in yesterday's Manchester Guardian on automation in the Soviet Union. Let not our hatred of some of the things that happen in that country blind us to its development of capital goods. I have read of and seen the progress and development that has been made there, and I believe it is probable that in the next decade the Soviet Union will beat the rest of the world in the production of many types of capital goods. If we are planning the future of this country on the production of such goods, we may find ourselves in very severe difficulties.
Therefore, our consumer goods and light industries should not be neglected, and I want again to call attention to the fact that the cotton textile industry still has a part to play in our economy. My hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) gave the impression that the Lancashire textile industry expected to be protected against difficulties in the home market. He spoke as though the cotton textile industry was asking for the protection of its own market when all the rest of British industry was operating in a free trade system. Well, we are not living in a free trade economy. Most of our industries are protected from overseas competition on the part of their chief competitors, but our industry has had to submit to the importation of goods made from subsidised raw material produced by cheap labour from one of the chief cotton textile industries in the world today, namely, that of India. That has been manifestly unfair, and so I hope that some attention will be paid to it.
The problem of low wages, which I want to develop a little further, is one which we must face in relation not only


to India and Pakistan, which is developing a light industrial economy, but also to Hong Kong and to Japan. Within recent weeks in the United States of America there has been great agitation in her textile industry because Japan has been importing cotton textile goods into that country to the extent of 2 per cent. of America's domestic production of cotton textiles. In this country we have reached the situation where over 12 per cent. of the cotton textile goods consumed in the United Kingdom are made in India, Hong Kong and Commonwealth countries and come into our market completely free of duty. Yet our trickle of exports to India has to climb a tariff wall of 30 per cent. or 40 per cent. I hope, therefore, that when this Bill is discussed in Committee the President of the Board of Trade will consider this problem.
I know that, when he replies to the debate today, the Minister of State will tell us that the Americans dealt with their problem by reaching an industrial agreement with the Japanese cotton textile industry to limit exports of Japanese textile goods to the American market. He will probably tell us also that at the present time there is a mission from the Lancashire industry out in India which will be going on to Hong Kong. I hope that the mission will succeed in this attempt to reach some agreement on controlling or limiting what could be unlimited supplies which could completely destroy our industry.
When the Minister replies I hope that he will answer this question. Does he anticipate that this system of encouraging industries to make agreements with each other on limited trade is a trend which will develop throughout the world? Also, does he believe that our tacit acceptance of the dual-pricing system will be to the long-term advantage of this country? I am conscious that we adopt it in relation to coal and steel but I suggest that our long-term interests as a manufacturing nation will not be served by this system, as we are dependent on raw materials, of which we have very few. Great industrialisation processes are developing rapidly in the East and in Africa in countries which produce raw materials. If that industrialisation is based on those countries providing themselves with cheap raw materials I do not think that it will

be to the long-term advantage of this country. I hope that the Minister will deal with the points which I have raised when he replies to the debate.

6.10 p.m.

Captain J. A. L. Duncan: So far the debate has dealt mainly with the cotton trade, and I hope that the hon. Member for Farnworth (Mr. Thornton) will forgive me if I do not follow his observations on that subject. I would merely congratulate him upon making a first-class protectionist speech for his own trade. I hope he will support the Government's Bill, although it is limited in scope when compared with the evils in respect of the cotton trade which the hon. Member would like remedied.

Mr. Thornton: I was not making, I hope, a protectionist speech. All I was asking was that our industry should have the same measure of protection as other industries, but not more.

Captain Duncan: That is fair enough. The point is that the hon. Member's speech seemed to go much further than the intentions of the Bill. The Bill is not "protection." I am glad to see present the hon. Member for Bolton, West (Mr. Holt), who may move an Amendment to the Motion. We ought to get this question clear. We are moving into a liberalised era—the amount of liberalisation that we and other O.E.E.C. countries have done has been very extensive—and an era of freer trade. The "free trade" to which I refer is not the "free trade" of nineteenth century Liberalism, for that meant "free imports" whereas all other nations were protectionists.
What we want to see, in dealing with this limited problem of real free trade—it does not mean that we should let things in free only if other countries let things in free—is fair trade. The Bill is simply an attempt to deal with unfair trade so that free trade in the future, whether it be European free trade or whether the G.A.T.T. arrangements eventually lead to freer world trade, will be fair trade. That is the main justification for the Bill.
The Bill is essential if we are to have fair trade and free trade. If we are to be free, it must be a corollary of that that competition is fair and not unfair or accompanied by hidden subsidies. A


great deal has been said, and no doubt will be said, about the definition. It seems to me that in producing the Bill the Board of Trade—I congratulate my right hon. Friend upon making his maiden speech as President of the Board of Trade—has gone as far as it can in defining unfair trade in that goods are to be regarded as dumped if their export price from the country of origin—I presume that refers to the wholesale price—or the country of export is less than their fair market price in that country.
We shall, no doubt, discuss this matter in Committee, but I would just say now that it seems to me that the definition is the best that could be devised. The fact that the Board of Trade is given a great deal of discretion in the later Clauses of the Bill is an advantage in that it can determine whether there are cases of unfair competition or dumping and bring legislation to the House for approval.
There are two trades in which I am particularly interested from my constituency's point of view. One is flax, the oldest textile industry of all. Flax sails were being made before cotton was ever imported into this country. That industry, which has been going for centuries, is having a very difficult task in keeping alive in competition with other textiles, man-made and natural. It is up against not a direct subsidy but an indirect one.
The French give a 15 per cent. remission of social service charges on flax exports. That means unfair competition on the part of the French exporters at the expense of our people. It is true that France is a member of G.A.T.T. and that we could have taken action, if we could have proved our case, under Article VI. If this point can be proved, our hands will be strengthened by the Bill, and our flax manufacturers will be enabled to compete fairly with other European countries. They are not complaining about Belgian competition. It is only the French competition which is alleged to be unfair. Does not the hon. Member for Bolton, West agree with that? Is it not right that there should be fair competition, and that the French should not be allowed a 15 per cent. benefit at the expense of their competitors? I believe that competition ought to be fair in all cases.
The other industry, which is of interest not only to my constituency but to the

whole country, is the horticultural industry. I believe that the Bill, properly operated, may be of very great interest to it. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) defined three types of dumping. I believe there have been cases of all three types in relation to the horticultural industry.
One of the most difficult types to deal with in the horticultural industry is the dumping of a surplus crop. That may be due to weather, lack of buying power in the home market in a particular year, or a whole range of other reasons. Suddenly the dumping occurs, and it may ruin the private grower here although he may have spent a year or more preparing his crop for market.
It seems to me that we do not want any advisory committees or other delay-making arrangements. We must have speed. I will give the House an example. On 4th June last year the French Government announced that for a period of a few weeks beginning on that day they would grant substantial subsidies for the export of new potatoes. Two days later they increased the rate of subsidy on exports to the United Kingdom for the following ten days. That was just the time when our own new potatoes were coming along. Yet the French Government wanted to dump a surplus crop upon us, and, no doubt after representations from the French growers, they encouraged the dumping with an export subsidy. Unless the answer in the form of a countervailing duty is given with speed, it is of no use at all, for the market here will have been flooded and the price will have dropped. I hope that the right hon. Member for Smethwick (Mr. Gordon Walker) is listening to this, because he wanted an advisory committee.

Mr. Gordon Walker: I did not, and do not.

Mr. Walker-Smith: It was the hon. Member for Ashton-under-Lyne (Mr. Rhodes).

Captain Duncan: I apologise. It was the hon. Member for Ashton-under-Lyne who wanted an advisory committee.
Although there may be a committee, it is important on these occasions for the Board of Trade to be free to act decisively and quickly, because, without speed, action is of no use at all.
I also wish to raise the Dominion aspect of this matter. As one hon. Member has mentioned, Australia may well become interested in Argentine exports of beef to this country. If it is proved that Argentine beef exports to us constitute dumping, that is to say, that beef is being sold to this country at a cheaper rate than in the country of origin, it would seem to me to be in the interests of British agriculture and Imperial relations alike that there should be the right of the Board of Trade to impose anti-dumping legislation.
There are several instances of other commodities—such as tomatoes—from Spain and from countries of the Soviet bloc where there is no fair market price, but a State-fixed price, and it seems to me very important that Clause 7 (3) should remain in the Bill to deal with exports from the Soviet bloc countries where there are State prices and no free market prices.
I believe that within its limited scope this is an essential weapon in our armoury—a weapon which has been employed and is in action in almost every other big country in the world, including the United States and the Commonwealth. I believe that if it is made strong and firm, without equivocation and above all without delaying action, it may not have to be used very often. The very fact that the deterrent is there—thht the weapon is in our armoury—may be of the greatest value to this country, and particularly to the interest of the industries which I have mentioned.

6.22 p.m.

Mr. Arthur Holt: I beg to move, to leave out "now" and at the end of the Question to add "upon this day six months."
The hon. and gallant Member for South Angus (Captain Duncan) has made a number of mild appeals to me which seemed to imply that I, as a free trader, was in favour of unfair trading. Of course, that is not so. At the extreme, all that the free trader is asking for is that Herr Schmidt in Germany be allowed to trade freely and without let or hinderance with Mr. Smith in England. If one thinks for a moment, this anti-dumping and subsidies Bill would be quite unnecessary, would serve no purpose and would not need to be brought in if there

were free trade between countries. [Interruption.]
It is quite obvious from the many comments he has made that the hon. Member for Kidderminster (Mr. Nabarro), although he is keen on competition in this country, is not so keen on competition from abroad, but is an adamant protectionist. If there was free trade between the United Kingdom and India—I take this example because there has been a lot of talk about textiles—and India started to send cotton goods into this country at dumping prices, then anyone here could make a profit by sending those goods back to India.
At the moment, India can send goods to England, and there is no tariff here to stop them coming in, but if there was any profit to be made by sending them back again they have got to get over a 30 per cent. tariff wall. I hope that hon. Members will be alive to the fact that this antidumping and subsidies Bill is entirely due to protection. We now have to have this Bill in order to protect ourselves from the worst results of protection.

Mr. Nabarro: Surely if we are to have a European common market, of which I am somewhat critical, this Bill will remain on the Statute Book? Surely it is essentially a safeguard against abuse in the common market arrangements and from other quarters as well, and the two things are complementary.

Mr. Holt: There will be no abuses if Governments stop interfering. It was put to me by the hon. and gallant Member for South Angus that because one was a free trader, apparently one was, therefore, in favour of unfair trading. The simple point which I make at the moment is that if, in fact, there is free trade on both sides between two countries, the kind of thing proposed in the Bill is unnecessary. In this debate and in our debate on the common market, some people seem to have got the idea that a free trader is concerned only about having free trade in his own country. That information is apparently obtained from the history of free trade in the last century.
May I briefly point out that what happened then was that after the Napoleonic wars this country was in a far more protected position that it is now. There were prohibitive barriers between ourselves and


France and very high tariffs in this country, up to 100 per cent. The feeling grew that no expansion of trade could take place unless we reduced them and literally removed some of these blockages, and it was hoped that as this idea of free trade gathered force, other countries on the Continent would do the same.
That was the point. Those who have studied Cobden will remember that after the passing of the Corn Laws Cobden went off on a great tour of the Continent and was warmly welcomed everywhere. He hoped that the Continent would have free trade. It did not. What did he do? He negotiated with France the famous treaty of 1860 which was warmly welcomed by Gladstone, who was the Chancellor of the year, and put through Parliament.
That was essentially a treaty under which both sides lowered their tariffs. Although I stand here as a free trader I do not like it to be suggested that a free trader is concerned only with removing tariffs in our case in the United Kingdom. We want them all down. That is one of the reasons why we welcome a common market. It is only in a small area compared with the whole world, but there is going to be a great lowering of tariffs, and that is something to be welcomed.
We come back to the point that this Bill is necessary because we have protection. That is a fact. We are not talking about Utopia. We have never had complete free trade and maybe we never shall have, but it does not alter the fact that this Bill is necessary because of protection and because Governments are constantly finding ways and means of interfering with trade. I hope that it will be realised that the whole point is that we have stability with free trade; there is nobody to interfere. We have protection at the moment. How can we make this protective system which we have to put up with for the time being as stable as possible?
As regards those elements in the Bill which are concerned with stopping Governments from interfering with trade by giving direct subsidies, I support the Bill, not because I hope that the Government will actually put on the countervailing duties, but because I think that the very fact that they have a weapon in their hand means that if a Government are

considering sending some products into this country, whether hides, cotton, manufactured goods or cherries from Italy, they will know that the Government here have anti-dumping powers to put on immediately to the exact amount of the subsidy. If it is known that we have these powers, and that they will be used, that will be sufficient, but it would be as well that anything we threaten to do we should threaten to do tonight. Of course there are many dangers in that, but I agree that administratively it is the most effective deterrent. Whether the powers which we are giving to the President of the Board of Trade are too large is another matter which we can perhaps discuss on another occasion.
However, the Bill does not deal with all those interferences by Governments which have been already indicated. One of them is specifically excluded by Clause I. It is where Governments institute some price control. I regret that the first action of the new President of the Board of Trade has been the licensing of certain steel products to stop them leaving the country. That is an interference. Here we are with a Bill the main project of which is that steps should be taken to reduce these interferences, and yet the first thing done by the new President of the Board of Trade is to increase them on one of our own products. I know there is a case for it, and we will not deal with it now. However, we must recognise that that has been done this week, and that sort of action is not covered by the Bill.
It is the kind of thing about which manufacturers in this country complain, the playing about with controls so that countries retain a large proportion of a raw material, and force down its price so that their own manufacturers may export much more cheaply. The leather trade has a strong complaint about the quota control of calf leather by the French. That is depressing the price of calf skins in France and is a help to the French manufacturers. I know that the quota is increasing, but it is a lot less than it was before the war. British manufacturers buy most of their calf skins from France and are, of course, paying higher prices than the French manufacturers. That is unfair competition. It is wrong, and it is that kind of thing which we have to try to remove.
We do not remove that abuse by the Bill. Let us be clear about that. I know that constant efforts are being made by the Government at O.E.E.C., and have been made for a number of years, to get the French to raise this quota. The same can be said for other products.

Captain Duncan: The hon. Member will agree that under G.A.T.T. the abolition of quotas is one of the prime aims to which we and the French are committed.

Mr. Holt: I agree.
Another aspect of this subject is that the Government are taking powers to deal with dumping from Communist countries or from dictatorships where there are controlled economies and where the price mechanism does not work. The Bill deals with those on a separate basis. That also is quite reasonable. I approach this matter with the aim that in the end Herr Schmidt should be allowed to trade with Mr. Smith and that no one should interfere with that trade. I know that in that aim we are seeking Utopia, but we are all agreed about the direction in which we want to go and there is considerable support for that general line of approach, although I know that others want to stop before I want to stop.
The third purpose of the Bill is to deal with dumping from private firms. It is on this topic that I join issue with the Government. Is there any difference between goods dumped in this country because a Government, with all the backing of the taxpayers, can deliberately subsidise the export of a product—an hon. Member mentioned new potatoes—and those dumped when the financial backing is that of a small company's capital?
For instance, if there is a silk manufacturer in France who is dumping stockings in this country at ridiculous prices, how long can he continue to dump stockings?

Mr. Gordon Walker: Just long enough to ruin the trade.

Mr. Holt: We will come to that point in a moment.
Prima facie he is dumping. There may be provisions in the Bill under which the President of the Board of Trade may say

that he will not do anything about it. If the manufacturer is selling in this country silk stockings at half the price for which he is selling them in Lyons, he is dumping—according to the Bill's description of dumping.
The House should think carefully before it decides that it wants to stop that. Where will those stockings go? Are they to be burned? Is it suggested that one private firm, whose capacity to damage the industry is very limited, must be ruled to be dumping and have its goods kept out of the country? Ten thousand dozen stockings coming in at half the price may depress the home market and slightly inconvenience some manufacturers in the hosiery trade who will not make so much profit, but it is hardly likely to do serious damage to the industry.
That, of course, is a rather extreme case. We must remember that at the moment we are dumping all over the place within the context of the provisions of the Bill. I remind hon. Members of a Press interview given on 18th October, 1956, by representatives of electrical manufacturers. The Monopolies and Restrictive Practices Commission had looked into their sales arrangements because it was suggested that they were selling generators, etc., to the Central Electricity Authority on equal tendering. The spokesman on that occasion was a Mr. Banks.
A Press report said:
Yesterday the electrical manufacturers pleaded their case in public at a Press conference at the Savoy Hotel.
This is the point to which I wish to draw the attention of the House:
The electrical industry … was the second largest exporting industry in Britain and had been subjected to the most acute competition. … It had met with considerable success … but Mr. Banks made it clear that this had only been possible because British manufacturers had been able to make good at home the losses they had incurred abroad.
They were justifying level tendering and equal prices on the basis that competition was so acute abroad that they had to make a good profit at home in order to make both ends meet.

Mr. Nabarro: The hon. Member is presenting only half the story. If one followed his argument through to its logical conclusion one would assume that the entire output of electrical manufacturers was sold to the monopoly of the


Central Electricity Authority and that losses abroad were being recouped by charging the nationalised undertaking an unduly high price. That is quite a wrong surmise in fact. Heavy electrical manufacturers sell a very large part of their output on the home market to private enterprise undertakings, and not only to the nationalised Central Electricity Authority.

Mr. Holt: That may be true; I do not dispute it. But it does not alter the point that I was making, which is specifically made in the quotation which I have read, namely, that they charge a higher price on the home market and remove some of the competition, by level tendering, in order to get their orders abroad, which, they suggest, they have to quote at a lower price and do not make a profit on some of them.

Captain Duncan: If that is in fact so—and I am not prepared to argue about it—why have not some of these foreign countries, which have the powers we want in the Bill, not taken action?

Mr. Holt: That is a very interesting point. It may be that they will do so.
When the Money Resolution was before the House during last Session the Board of Trade was good enough to give me some details of the anti-dumping legislation which other countries had introduced. Those details contain a number of references to "legislation is pending"; "this country is intending bringing it in," etc. It is a growing practice. All I want to do is to draw the attention of the House to the fact that if we do not see exactly what our object is, there are great dangers ahead.
We can safely bring in measures which will dissuade Governments from interfering with trade—chiefly by subsidies but also by price control in one way or another—but when we start to attack what some people may call dumping by private firms we are on much more dangerous ground. My point about the electrical manufacturers was made to give one instance of technical dumping on our part. Are we to impose anti-dumping duties upon some electrical manufacturers from abroad who, we find, have admitted in the Press that they are getting a higher price in Germany than in Britain, and are not making any profit in Britain? Such

action may only be marginal, and amount to a small percentage, but according to the Bill it is still technically dumping.
Much depends upon the interpretation of Clause 1, which reads:
Where it appears to the Board of Trade"—
that certain goods have been dumped—
and that, having regard to all the circumstances, it would be in the national interest, they may exercise the power conferred on them. …
It would be very interesting to hear the opinion of various hon. Members as to what should be the Board of Trade's interpretation of "in the national interest." The hon. Member for Middleton and Prestwich (Sir J. Barlow) was very concerned to get a body of case law built up, which seems entirely to defeat the idea of the President of the Board of Trade that there will he a semi-dictatorial decision of his own, based not upon any particular case law but purely upon what he considers to be the national interest at any one moment.
I should like to draw attention to what is happening in America. First, Article VI of G.A.T.T., interpreting "the national interest", says that anti-dumping legislation may be introduced if a certain importation,
is such as to cause or threaten material injury to an established domestic industry.
I do not know whether the President agrees with that. Recently a new precedent has been established in America which affects our goods. Some cast iron soil pipes of a standard type being imported ino America have recently been caught by a decision of the Tariff Commission under its anti-dumping duties. The interesting point is that a comment in a United States trade journal, Domestic Engineering, of December, 1955, says:
This decision of the United States Tariff Commission set two new precedents. … First, of five cases thus far decided by the Commission … this was the first case in which the Commission found that an industry in the United States was being, or was likely to be, injured by the importation of foreign goods. In all preceding cases no injury was found by the Commission. … It was established that the showing of any injury"—
"any" is the operative word—
was sufficient (not necessarily, as previously held, substantial or material' injury). Alas, the phrase in the Act an industry in the United States' could mean a section of the industry in a particular area.


I know that in one sense this is not relevant to us, but I give that example to show that once we start on the slippery slope of seeking to define what is in the national interest bodies come along and urge their own interpretation, and the tendency is to move in one direction according to the feelings at the moment. If people want the definition to be broader it becomes broader; if they want it narrower it becomes narrower. If we give these very wide powers to the President and enable him to decide the true interpretation of what is in the national interest I wonder how it will be interpreted in ten years' time.
Would anyone like to risk a guess? Will a whole lot of goods have been subjected to anti-dumping restrictions? If we have a series of fairly liberal-minded Presidents there may be scarcely any cases, but if we have a protectionist President the tendency will be the other way. It is quite clear that the matter is not within the control of Parliament as it now stands.

Sir D. Eccles: The hon. Member knows that no duty can be imposed without an Order being laid before this House, subject to an affirmative Resolution. Therefore the House will have a chance to deal with each case.

Mr. Holt: I am aware of that. As the Minister says, the House will have a chance, but as everybody knows, when the President of the Board of Trade puts on the Whips he gets the thing through. He must realise that a great deal depends upon his own powers of resistance to many interested people who will put up cases to him. In this respect we must try to be effective protectors of the public interest against a protectionist President of the Board of Trade. I am not suggesting that the present President is a protectionist; I hope that he is not.
I hope that the President will give serious consideration to the point that I have made about private industry. If he accepts it, I think, after a long study of the matter, that it would require only some extra phrase at the end of Clause I to the effect that the imports of private firms, who are operating entirely freely and are in no way assisted by Governments, should not be subjected to antidumping duties. If the right hon. Gentleman

does not like that, I hope, nevertheless, that he will consider the arguments that I have advanced, and see in what way it is advisable to curtail the wide limits of this Bill.

Mr. Donald Wade: I beg formally to second the Amendment.

6.50 p.m.

Mr. Gerald Nabarro: I hope that the Amendment will be decisively rejected by the House.
Though my right hon. Friend did not say so in these words, I am sure that the correct interpretation of his view upon the necessity for this Measure is simply that, as we move towards a freer European trading market and a single market—which I believe is one of the major objectives of the policy and purposes of Her Majesty's Government—it is necessary, in certain extreme circumstances, to have powers of sanction to discourage or even preclude entry of goods and commodities from Europe—and perhaps elsewhere—if there is evidence that they are being dumped or sent to the United Kingdom on unfair trading terms.
Though I have been critical of the European free market proposals—and unless there are effective safeguards I shall continue critical—I cannot see any possible objection from any quarter of this House to ensuring that the livelihood of the British workman shall be safeguarded; that the prosperity of British industry, as far as this House is able, shall be safeguarded by measures of this kind against extreme unfair practices on the part of overseas competitors; and that, I believe, is genuinely the purpose of this Bill.
Of course, there will often be price differentials as between goods of the same kind sold on the home market and those exported oversea. We are guilty in that regard; and a passing reference has been made to coal. I shudder to think what the finances of the National Coal Board would be like at this moment if there had not been a substantial premium on every ton of coal sold in Western Europe and elsewhere during the period of nationalisation. That amounts to a very big tonnage, and it has all been sold at a premium—or price advantage, if hon.


Members wish to put it that way—compared with the price on the home market.
Exactly the same argument may be advanced with regard to steel, and I see nothing detrimental or unsatisfactory, for example, to the American economy in the fact that a Jaguar car is sold in the United States—leaving out the element of Purchase Tax in the comparison—at a somewhat lower figure than in the United Kingdom in order to attract and promote increases in American sales and earn what is, from our point of view, hard currency. Those are legitimate trading practices. What, in my opinion, are illegitimate trading practices are those which comprise a deliberate attempt on the part of a foreign nation to flood our home market with particular commodities or goods at a particular time, thereby undermining the security of employment of the British workman and affecting detrimentally the prosperity of the particular industry concerned.
We have, of course, had experiences of this kind. I have no desire to exaggerate any particular case, but, in the complexity of this situation, I think it may be helpful if I try to explain one of the pitfalls which we may meet in introducing legislation of the kind contemplated today against the background of our general arrangements in relation to the General Agreement on Tariffs and Trade. I speak particularly of the Kidderminster carpet industry, as indeed I should do in this House, as the major part of the industry is concentrated in the town of Kidderminster. It is a valuable industry which contributes largely to our national export trade.
As the President of the Board of Trade will know, this industry has suffered very considerably in the last twelve months through short-time working, and in a measure from unemployment. In fact, the incidence of short-time working in this industry has been, in relation to its size, somewhat greater than in the motor car industry. This short-time working has occurred, in my opinion, partly due to the credit squeeze and to Purchase Tax, and partly due to the restriction on the export of British carpets to Australia. Largely, at the cheaper end of the industry, it has been due to a phenomenon which may be illustrated by a series of figures which I have collected regarding the imports of cheap cotton carpets from

Belgium. In the period between 1952 and 1956 inclusive, only a period of five years, the increased imports of these carpets has amounted to 600 per cent. Relatively, that is something far worse than any other branch of the textile industry has had to suffer.

Mr. E. Thornton: What protection has the Kidderminster carpet industry against Belgium?

Mr. Nabarro: I will come to that later.
In 1952, the United Kingdom import figures of Belgian cotton carpets were 978,830 square yards. In the following year, 1953, the figures were 2,477,870 square yards. In 1954, they almost doubled to 4,552,177 square yards. In 1955, the figures were 5,250,590 square yards. Last year, though there are no official figures yet published, they are estimated to reach almost 7 million square yards—6,808,563 square yards.
Every hon. Member opposite who has spoken has emphasised the point that British manufacturers and the trade unions do not mind fair competition. Yet the Belgian cotton carpets are imported into this country at a lesser price than the cost of raw materials in the equivalent carpets manufactured in Britain. Everyone has a right to question how it is possible for that to be done. I have done considerable research on this subject. I have established the fact that the Belgian workman is paid approximately the same amount as the British workman; that the Belgian machinery costs, approximately the same; that general overhead charges in Belgium are approximately the same as they are here.
I come back to the element in respect of raw materials. I find that the Belgian manufacturer gets his raw cotton, and thus his cotton yarn, evidently at a much lower figure than anything which can be achieved by way of purchase by the British manufacturer. How is it done? Here is the tortuous train of events which my right hon. Friend will have to pay some regard to under this Bill. What evidently happens is that all the raw cotton that comes into Belgium for the production of these cotton carpets is obtained from the Belgian Congo. In fact, practically none of the Belgian Congo raw cotton is sold on the open market. It is bought by financial


interests or Belgian banks often before the cotton is even sown. It is bought long in advance, and this last year the amount exported from the Belgian Congo to Belgium was 86 per cent. of the crop. It is supplied to manufacturers in Belgium at prices which are never disclosed. All we know is that the price is vastly lower than the world price, which, is the average paid by the British manufacturer.
That leads to the belief that the element in respect of raw material cost to the Belgian manufacturer is so much less than the figure that the British manufacturer has to pay for raw cotton as to make it impossible for the British manufacturer to compete with the finished product.
How do we deal with a case of that kind? The carpet manufacturers in all parts of the country, and not only in Kidderminster, have applied for a revision of the tariff arrangements under G.A.T.T. That application was made many months ago and has gone through all the inordinately slow processes of examination in the Board of Trade, including the hearing of objections. Of course, there are objections, which come from the vested interests, namely, the merchants who import Belgian cotton carpets and who are on a very good thing with the inflated sales. In the end, the whole application is bogged down under this wretched G.A.T.T. procedure.
I cannot fit this form of dumping into the Bill; I cannot find a provision in Clause 1 which will cover it. It is a form of subsidy so overt in character and so manipulative in design, in the hands of foreign financial interests as to make it nearly impossible of precise ascertainment. I want to know the views of my right hon. Friend on this kind of thing. If we are to have protective measures against dumping in order to secure employment in this country, which is the primary purpose, we must have regard to the kind of thing which I have mentioned.
I will mention a further and parallel case, because it is germane to much that has been said today. Recently we have all been concerned with the activities of Colonel Nasser, who has sold part of the Egyptian cotton crop to Czechoslovakia, not for money but in return for armaments produced at the Skoda works. It would be very interesting to know what price the Czechoslovakian Government

charged their textile manufacturers for that cotton prior to the export of the cotton piece goods to Great Britain and elsewhere. It was probably a manipulated, artificial price which contained a substantial element of subsidy. Again, this is a manipulative process which it would be excessively difficult to fit within the framework of the Bill.
I return for one moment to what I said about carpets earlier in order to respond to the question asked of me by the hon. Member for Farnworth (Mr. Thornton). The increase in tariffs asked for in the application is very big. Before the war there was a tariff of 1s. per square yard on carpets, or 20 per cent. ad valorem, whichever was greater. In prewar days that represented generally a measure of protection of 30 per cent. or 40 per cent. The application to G.A.T.T. is for the protection to be increased to 7s. per square yard, or 20 per cent. ad valorem, whichever is greater. The hon. Gentleman will recognise from those figures that the increase asked for in the application is very substantial indeed.
I do not regard this as properly a matter for a G.A.T.T. application, because it concerns a deliberate policy of dumping on the part of Belgian interests which is rapidly deranging the cheaper end of the British carpet industry and is causing substantial short-time working in the industry and a good deal of unemployment.

Mr. Thornton: I am extremely obliged to the hon. Gentleman. He has presented an excellent case for the Kidderminster carpet industry. Would he not agree that the cotton textile industry has all the problems and disadvantages of the Kidderminster carpet industry plus no protection against imports?

Mr. Nabarro: That question would involve me in a long and discursive operation. I did not want to interrupt the hon. Gentleman, because many other hon. Members wish to speak, but I thought he was something less than just to himself when he described what is happening in India today in regard to the price of cotton. I think he will find that the Indian Government place a ceiling on the price at which the cotton crop should be marketed. By that means they secure indirect control over the acreage of cotton sown and encourage an appropriate


acreage being devoted to growing food. That is the primary consideration and it is not, in my view, an unfair trading practice. It does not compare with what I have described in regard to the Belgian carpet industry.
Where the hon. Gentleman was correct was in saying that I suffered precisely the same disability as he in defining all the difficulties of the carpet industry, because many of them are due to the grave disparity of Anglo-Indian tariffs; but that is not a matter which comes within the provisions of the dumping Bill which we are now discussing.
I would add to what I have said generally about the Bill that the Economist this week made an interesting point when it said:
No doubt Mr. Thorneycroft and Sir David Eccles will have been talking about the Bill to M. Spaak this week, and trying to persuade him (on the whole rightly) that the concessions to be made to British protectionism are not very big ones.
I would not concede that they are not very big concesisons. I do not think they are concessions at all but are a measure of equity and a complementary factor in progressing towards a free trade area.
Let me add a word before I resume my place about the horticultural industry, which is a special constituency interest of mine as well as of other hon. Gentlemen, especially on this side of the House. We were told that the European common market arrangement would exclude food and farming products. The French do not like this very much, because most of the goods which they send to this country are within the horticultural group. The Italians like it even less. Already the French and the Italians are trying to persuade representatives of the British Government to include horticultural products within the European free trade arrangements and not to exclude them, as was originally suggested.
I would enter a powerful plea with my right hon. Friend to continue our tariffs on all horticultural products and, if necessary, to use the powers of the Bill to reinforce them. The case of new potatoes mentioned earlier was not a matter of limited interest. That point could be applied with equal force to other kinds of horticultural products. We have fought—my hon. and gallant Friends the Members for Isle of Ely (Major Legge-Bourke) and

South Angus (Captain Duncan), and I—a long action in this House to get protection for horticulture and to prevent dumping by the Italians and other Continental nations. We do not want to see these hard-won advantages lightly frittered away.
The National Farmers' Union, in an admirable statement to hon. Members, strongly supports the view which I am expressing that we should not only retain our existing preferential tariff arrangements and the protection they give to home horticulture but should welcome, in addition, the provisions of the Bill as furnishing a speedy and most effective additional means of helping the home grower, who has many vicissitudes to contend with. He should not have heaped on his broad shoulders the additional vicissitudes which can be caused by dumping of produce from Western Europe.
I hope that the Bill will go through with the minimum opposition and with amplification in Committee of many of its terms and expressions. I wish it every good fortune in reaching the Statute book at an early date.

7.10 p.m.

Mr. G. M. Thomson: This is a rare occasion which, I feel, really ought to savour. I do not suppose there is any hon. Member opposite with whom I normally disagree more than the hon. Member for Kidderminster (Mr. Nabarro), who advocates a number of policies which deeply affect the prosperity of my constituents, but today I am in the fortunate position of being in agreement with the very powerful case he has put forward.
I wish to add my modest words to speeches which have been made in support of this Bill. Its provisions may affect a great deal the attitude of the City of Dundee, which I represent, towards the proposals of a common market. As the President of the Board of Trade knows, Dundee is the centre of the nation's jute industry. I hope he will pardon my calling attention to the special position which the jute industry occupies in the city. I can only excuse myself by saying that in Dundee we are very anxious that the new President of the Board of Trade should be informed as quickly as possible about our problems.
The President will probably know that jute is in a unique position in the sense that we have a national industry which is very intensively concentrated in one medium-sized city with a population of less than 200,000. It is an industry which still dominates the City of Dundee, despite the very excellent new light industries we have had established since the war. Jute has been recognised by Presidents of the Board of Trade in successive Governments as an industry of strategic interest to the country.
Under the proposals for a European free trade area, there is a very real danger that Dundee would face mass unemployment. At the moment the jute industry in Dundee enjoys—I say so very eagerly—a protection which I wish the cotton industry of Lancashire also possessed.
The two main sources of jute goods which compete with Dundee are India, on the one hand, and France and Belgium on the other. In the case of India there is a government-control exercised over the import of jute goods, a control which even the present Government, with its known doctrines of disbelieving in all control, has felt compelled to preserve. In the case of French and Belgian jute goods we have a tariff imposed. At the moment, therefore, the Dundee industry is protected.
But the kind of position which the hon. Member for Kidderminster has been outlining in regard to Belgian cotton carpets exists in relation to continental jute goods. At the moment France and Belgium produce a surplus of jute goods for which they are anxious to find a market. It is a surplus which is just about equal to the 40 per cent. imports of jute goods into this country required in addition to the output of the domestic industry in Dundee. For various reasons, however, those jute goods are produced with concealed subsidies. There is no doubt that if the present protection were to disappear in the proposed European free trade area it would be a catastrophe for Dundee. Even though the proposed change would take place gradually, perhaps over ten years, it is very difficult to see how Dundee with this intense geographical concentration could adapt itself to the new circumstances.
Like hon. Members on both sides of the House, I hasten to add that the jute industry in Dundee does not fear fair competition. I think it true to say that the Dundee jute industry since the war has modernised itself and made itself the most up-to-date textile industry in the country. Immediately after the war a jute working party was set up. When one looks back on the recommendations of that working party, one finds that all the principal recommendations laid upon the industry have been met. Ten million pounds has been invested in the jute industry since the war. This investment has been made on assurances given by successive Presidents of the Board of Trade that suitable safeguards would be given to Britain's jute industry, sited as it is in one small and somewhat isolated city. The jute industry is a modern and efficient industry which does not fear fair competition, but it would be impossible for it to meet the kind of subsidised competition which it would be required to face in the European free trade area unless the provisions of this Bill were available to give it protection.
My main regret is that in this Bill the definition of what constitutes dumping has not been extended. I agree with the hon. Member for Kidderminster about this. In the case of continental jute goods, as in the case of Belgian cotton carpets, very often it is difficult to prove precisely what is happening. I think it would be very much better if the definition in Article VI of the G.A.T.T., which has been quoted already, had been included in the Bill
such as to cause or threaten material injury to an established domestic industry.
It would strengthen the Bill a great deal if that phrase could be inserted.
I do not wish to detain the House, as other hon. Members desire to speak, but I wish to say that in putting forward this plea for a constituency interest, which I think is a fair and just constituency interest, I am not asking for a moment that we should not seek industrial arrangements, both national and international, which will allow goods to be produced in the places in which that can happen most efficiently. Clearly in the long run that sort of thing is in the interests of us all because it increases output and raises standards of living.
That is the case put forward in connection with the proposed European free trade area, but I think it is most important for Governments to keep in mind the points which were made so excellently by one of my hon. Friends representing a Lancashire constituency about dealing with the adjustments which must take place in this process. The changes brought about by moving an industry from one place to another or in reducing its scale should take place gradually and under social control. It is very important to keep in mind that the end product of all industrial processes is the welfare of the men and women who use the fruits of those processes.
It is also very important—I would say this to the hon. Member for Bolton, West (Mr. Holt) on the Liberal benches—that in looking at the economics of this matter, one should not interpret the word "economics" too narrowly. I sometimes think that accounting concepts used in free trade arguments are very limited indeed. After all, there is a social accounting to be borne in mind as well as a purely commercial accounting. One has to remember the return on the social capital of the whole community associated with an industry as well as the actual industrial and commercial capital sited in the factories of that industry.
In bringing about changes in the pattern of industry over a large area like Europe it is very necessary in the first place to bring those about very slowly and to preserve the right of Governments to social control and social planning. It It is also very necessary to remember that our economic concepts should be sufficiently broad, and that all those processes have as their end the raising of the living standards of human beings and the making of lives of men and women happier and fuller.

7.19 p.m.

Mr. R. Gresham Cooke: I cannot follow the hon. Member for Dundee, East (Mr. G. M. Thomson) into the intricacies of the jute trade, but I realise that in industry there has been a certain amount of concern about the European common market. I think we ought to place on record today that more than two-thirds of British industry, through the Federation of British Industries, has expressed agreement with the

European common market, and for that the House ought to be rather grateful—

Mr. Nabarro: With many misgivings.

Mr. Gresham Cooke: Yes, but the majority came out in favour of the proposal. It is quite obvious that the European common market cannot work properly unless the conditions and tariffs are fair on all sides. One of the objects of the Bill is to see that the conditions and tariffs are fair. I think that hon. Members on all sides of the House, with the exception of the Liberal Party, agree in principle with this Bill, but I must say that I have a great many doubts whether it will be effective, and I am not certain whether, if I had to do so, I could go into the Lobby conscientiously tonight and support this Bill, for reasons which I will give in a moment.

Mr. Holt: I am relieved to hear it.

Mr. Gresham Cooke: For exactly opposite reasons to those for which the hon. Member for Bolton, West (Mr. Holt) opposes the Bill.
The whole core of the Bill lies in the juxtaposition of Clauses 6 and 7, and on the comparison between the export price of goods coming into this country, as set out in Clause 6, and the fair market price of the goods in their own home country. If the export price is below the fair market price, the Board of Trade has power to impose additional duties, as I read Clause 6, which says—
(2) If the goods are imported under a contract of sale which is a sale in the open market between buyer and seller independent of each other,"—
that, of course, means a foreign seller and a British buyer—then, if I read the Clause correctly, the export price will be the wholesale price of the goods landed in this country. That has to be compared with the fair market price of the same goods in the country of origin, as set out in Clause 7, which says—
..… the fair market price shall be taken to be the price at which goods of the description in question are being sold in the ordinary course of trade in the said country for consumption or use there.
Indeed, in the Explanatory Memorandum, the description of Clause 7 says this:
Clause 7 defines the 'fair market price' of goods imported into the United Kingdom


by reference to the price at which similar goods are sold for home consumption in the country of origin.
It appears, then, that the price referred to in Clause 7 is the retail price in the country of origin. If I am correct about that, this Bill will be brought into disrepute at once, because we shall probably find that all goods imported into this country are subject to the provisions of this Bill. We are comparing the wholesale price at which goods are brought into this country with the retail price at which those goods are sold on the home market, and we shall probably find that the wholesale price is below the retail price paid at home. I would ask the President of the Board of Trade to clear up that point, because it is a very important one when we come to consider whether the Bill is likely to be effective or not.
If my reading of the Bill is wrong and both Clauses 6 and 7 refer to the wholesale prices of goods entering this country, then here again I would ask that verb careful thought be given to this question during the Committee stage of the Bill in order to see whether these Clauses are really watertight. Let me give an example. I have been on the other side of the fence in this problem, in that I was closely connected with the motor industry and concerned in selling cars in Canada at a price which was considerably cheaper than that at which Canadian cars could be manufactured there. British manufacturers were accused of dumping cars in Canada, and the Canadian automobile manufacturers went to their own Government asking that legislation should be brought in against the British motor industry.
The argument then revolved on the point of the true wholesale price of British motor cars—whether it was the list price, less 15 per cent., at which many manufacturers were selling their cars, the list price, less 25 per cent., at which some others were selling, or the list price, less 30 per cent., at which some others were selling their cars.
I am happy to say that, in the ultimate, the anti-dumping legislation of Canada was not invoked against the British motor industry, for one very good reason, and that was that the wholesale

prices of British motor cars could never be strictly ascertained. In other words, the Canadian anti-dumping legislation was not as clear as it should have been. In this case, it must be the duty of the Board of Trade and its officials to see that any anti-dumping laws, and particularly Clauses 6 and 7 of this Bill, are absolutely clear as to what is meant, in order that such provisions may be effective.
Let me now give another example. If we send cars into Italy at the present time, one meets a tariff comparable with our own, and the Italians say that the tariff as between this country and Italy is fair. However, in addition to the tariff, the Italians have another extra tariff of 9 per cent.—I think it is at the present moment—which is called a compensation tax, the object of which is to make up for what the Italians claim Italian manufacturers have to suffer; namely, a sort of purchase tax levied on the raw materials—electricity, coal, steel and so on—used in the manufacture of Italian cars.
Here again is a point of considerable difficulty. Whether or not the Italians are right in saying that there is a purchase tax on their raw materials sufficient to permit them to charge a compensation tax of 9 per cent. on foreign cars entering Italy, the difficulty is in finding out what is really the wholesale price of goods in foreign countries. France also imposes a compensation tax, I think of 5 per cent., to make up for some form of purchase tax levied on goods there.
In principle, naturally, as the greater part of the House does, I support this Bill, but when we come to look at the actual wording and make a comparison between Clauses 6 and 7, I am not certain that the provisions will be effective. I think it may be found that the Bill is very loosely worded. I am not certain whether the Board of Trade has yet made up its mind whether it is dealing with the wholesale or the retail price, and, if the Bill is to be effective in operation, this point must be most carefully watched in Committee. Having said that, and having made that reservation as to its effectiveness, I should like to give the Bill my support and wish it a fair wind for the future.

7.28 p.m.

Mr. John Grimston: Like every other hon. Member who has spoken in the debate, I should like to welcome this Bill, and to say clearly that, while we cannot do everything which every trade or industry would like us to do, I think it is a most useful piece of machinery. I shall be very brief, and shall direct my remarks to the one point whether the duty, when it is applied, shall be applied in the way which is proposed in the Bill, which is only permissive, or whether it should be mandatory.
I know that, in his opening remarks, my right hon. Friend the President of the Board of Trade said that, generally speaking, industry was in favour of these powers being permissive, but I think it is also fair to say that that was probably before industry realised how strong the pressure for the European common market is going to be. I feel that the grounds advanced by industry, namely, that mandatory powers would invite retaliation, might now he felt by them to be a lesser evil than going into the common market with the possibility of having an antidumping 13i11 which was not, in practice, effective.
I believe that the experience of Canada, to which my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) has referred, is very important in this respect. I would say that it is generally found by exporters that the Canadian anti-dumping laws are the most difficult to circumvent, which, after all, is what the exporters are out to do. Those laws make dumping very difficult. The antidumping duties are automatically imposed and collected by the Customs of Canada, and it is then up to the exporter to prove that his prices are in fact fair prices and not dumping prices.

Mr. Holt: With his experience of the Canadian market, would not the hon. Gentleman agree that the Canadian Customs duties and the difficulty in getting United Kingdom goods into Canada are some of the reasons why so many British manufacturers are frightened of exporting goods to Canada? If we make these dumping duties too cast-iron, they then in fact restrict trade. In our particular case, we want to export goods into Canada, and I should like to do so, but because of the anti-dumping duties, many British manufacturers are prevented from doing so.

Mr. Grimston: That is an interesting point, but I do not know whether I should be in order in following it.
The difficulties of the Customs machinery in the United States are even greater than those found in Canada. Our experience in exporting to Canada is that once we have convinced the Canadian authorities that our prices are right and fair they are most co-operative and the difficulties are overcome.
I return to the question whether the imposition of these duties should be mandatory here or not. I think that, with the present proposal, one can envisage many months, and may be a year, of inquiry before the Board of Trade can make up its mind that the case for imposition exists. I would remind my right hon. and learned Friend the Minister of State of something that a former Permanent Secretary said. First, however, I should like to congratulate my right hon. and learned Friend on his appointment, and on continuing to lend lustre to the representation of the County of Hertford in this House. A former Permanent Secretary who is now in industry once said that the real problem with the Board of Trade was to know whether it was an administrable unit. It is quite clear that there is plenty to do there, and we may possibly be putting on that Department a great deal of additional work.
Another argument against making the powers permissive is that the Board of Trade may, in negotiations which we may not learn about, undo the effect of the Bill by private understandings reached in negotiations with Commonwealth or foreign countries. The President referred today to an understanding which had already been given to the Commonwealth. We do not want to see the effect of the Bill undermined in that way.
I think it is possible to envisage a recurrence of the kind of thing which happened so often before the war, when Germany, as a matter of policy, subsidised all her exports to this country to the extent of 33⅓ per cent. The Germans denied doing it, but if that happened again, if any other country were to do it, the Board of Trade might be faced with the necessity of coming to the House with dozens and dozens of Orders. I should have thought that we had already plenty to do, and that we should not want to do that, too; and that is in


addition to the fact that the House is not generally at its best when discussing arithmetic.
For all these reasons I hope that the Board of Trade will consider again whether or not it may be better that the powers contained in the Bill should be mandatory and not permissive. I support the Bill, as I have said, and I seek only to make it more certain that the foreigner inclined to dump in this country is made to see that that will not pay.

7.33 p.m.

Major H. Legge-Bourke: Earlier in the debate, the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) said that he could not understand how anybody who believed in private enterprise was not a free trader and could be a protectionist. I make no bones about being a protectionist, and at the same time I am second to none in believing in private enterprise. The reason why I believe the Bill is necessary is that there are always some people who will not play fair; and there is also the fact, which we have to face, and which I do not think the Liberal Party has ever really faced closely, is that there is all the world of difference between being a debtor and a creditor nation.
It is for those reasons that we have to make Governmental adjustments of one sort or another. The question is whether we should adopt the Socialist method of direct Government control, or put on a tariff, or make some arrangement of that kind, so as to reduce Governmental interference to the minimum, leaving actual control in the hands of trade itself. If we have to choose between those two things, then a tariff is the infinitely better way of proceeding, and it is infinitely better than seconding or recruiting a body of people expressly detailed to operate some new controls.
In this Bill we are fulfilling a pledge given some years ago by the Conservative Party. We published it originally, I believe, in 1948, in "Conservative Policy for British Horticulture," which was reissued a few years ago. There are two passages in it I would quote, because I think they are of some important relevance to this debate. In dealing with the 1948 situation and the Agricultural Charter, we said:

For the future we consider that there should be an increase in the production both of vegetables and fruit not only up to the peak output of wartime but beyond it.
Later we said:
Safeguards on the lines of those adopted by Conservative Governments before the war must be introduced, whether by way of sliding tariffs adjusted to seasons or in other ways, to protect British horticultural producers from the dumping of foreign surpluses.
That was repeated in the 1949 declaration, "The Right Road for Britain," in which we said:
A Conservative Government will protect British Horticulture against destructive imports.
I should like to feel that this Bill is the complete implementation of that pledge. Certainly the review of G.A.T.T. in 1953 went some way to adjusting the tariffs, in some instances 100 per cent. In considering what happened we went on record as saying even that we would never import anything we could produce equally well and in sufficient quantities here. I would only remark that since 1947, in the last ten years, the amount of vegetables and fruit imported into this country has virtually doubled, while the price of it has increased by even more, to give some idea of the peril in which the home growers are constantly placed. Unless there is anti-dumping legislation which will really protect them we cannot really say that we have fully implemented the undertaking on which we have fought every General Election—at any rate, every General Election in which I have been a candidate—an undertaking which we have reiterated always more strongly.
Listening to what has been said in this debate, and particularly by my right hon. Friend, I have the impression that this Bill is to be the last desperate resort when all other methods have failed in trying to dissuade people from damaging our industries. We have had a very illuminating observation from my hon. Friend the Member for Kidderminster (Mr. Nabarro) today which show how difficult it will be to decide exactly what is the native cost of any produce.
Incidentally, I should like an assurance from the Minister of State, Board of Trade, when he replies to the debate, that the expression used in the Bill, "goods of any description", includes food and foodstuffs and agricultural produce which is not edible. It is very important that it should include them, because there is


much horticultural produce which is not eaten—bulbs, for instance; and we import bulbs from Holland. Such produce is of vital importance to our home producers, and if it is not included a great deal of the value of the Bill will be lost.
The hon. Member for Bolton, West (Mr. Holt), with whom I have often joined in argument, has reiterated this theory that it is impossible for anybody to decide what the national interest is. I agree with him that it is extremely difficult for anybody to do so. Probably it is what every man thinks it is, and that is about as far as we shall get in deciding it. If the hon. Member really thinks that it is difficult to define the national interest, I am astonished that nevertheless his party and those who believe in his philosophy think that they can impose a system of universal free trade on the whole world. I think that all Governments have made a big enough mess of their own country without taking time off to try to teach the rest of the world. [HON. MEMBERS: "Oh."] Yes, all Governments. I deplore the necessity for Government, and I certainly think it would be absurd to suppose that anyone can say what is precisely in the national interest here. It is even more absurd to attempt to say what is good for the rest of the world.

Mr. Holt: The difficulty is not in saying what any one of us thinks is the national interest but in describing the national interest in such a way that we all agree with that description. What the hon. and gallant Member thinks is the national interest will be quite different from what the President of the Board of Trade thinks it is.

Major Legge-Bourke: I am sure that what the hon. Member thinks is the national interest is quite different from what my right hon. Friend the President of the Board of Trade believes. Something has been said in debate about my right hon. Friend when he was Minister of Education. I would say that he has plenty of scope inside the Board of Trade if he is still in an educational frame of mind, because for a considerable number of years I have been trying to educate that Department out of a free trade complex into the belief that protection is the best answer for this country, more particularly because I believe that we are a debtor nation and that until we become a creditor nation we cannot bask in the

luxury of having free trade. This is all a question of the means or the end, a question of which comes first, the cart or the horse.
Free trade is a goal to aim at, but we shall never get to that goal by adopting free trade before we become a creditor nation. We shall never win prosperity by free trade. It is something we shall enjoy when we are prosperous. Free trade has worked only when we were the greatest creditor nation in the world. That is one of the reasons why I am most concerned about these plans for a European common market. I am absolutely ruthlessly opposed to that project and I shall continue to be opposed to it, so long as it is based on the idea of free trade, until we are a creditor nation. I do not believe that it can do anything but harm.
I am reinforced especially in my anxiety about agriculture and horticulture by the words spoken by M. Spaak a few days ago when he said:
It will he exceedingly difficult to persuade nations which live largely by their agriculture to accept this exclusion. … By the end of the 12 to 15-year transitional period, according to the draft treaty, agriculture is to be part of the general common market.
If that is what is in the mind of European countries, this Bill is all the more necessary.
If that happens, it will mean that we are going into future arrangements with Europe under false pretences. It will damage our basic industry. I believe that today, more and more, we are coming up against an old problem which has existed since long before the war and certainly since 1932 when the Ottawa Agreements were signed. It is the question of whether or not, or ever, we are going to believe that the Americans are not in business in the altruistic interest of keeping us alive. The whole European set-up is based on the American aim to smash the Commonwealth as a trading organisation. Until we realise that, none of our economic or trading policies will make sense.
I welcome the Bill because it is a nibble in the right direction. I hope that it will be used quite firmly and that that will be made very clear to all countries, whether it be the United States, or countries in Europe, or Japan or even countries such as India inside the Commonwealth. I hope that we shall not hesitate


to use the Bill in a way which will make our own British economy as strong as possible as quickly as possible. If we are going to look upon the Bill as a last refuge we might just as well not waste time on it today. I believe that it can be used as a most useful instrument, but there are one or two minor details which I should like to query.
Clause 5 gives power to require information from importers, and the Commissioners of Customs and Excise are given permissive power to require the importer of any goods
to state such facts concerning the goods and their history as they may think necessary to determine whether the goods are goods originating in a country specified in an order under this Act …
I should have thought that that should have been automatic and that the Commissioners of Customs and Excise should have been obliged to do that and not have been given power to exercise discretion. If the Bill is to be effective, I should have thought it absolutely essential that the powers should be obligatory and not permissive. I am rather surprised that the Commissioners do not do this already. I should have thought that they would have already checked up on the source of goods and that it ought not to be very much more difficult to add any special requirements under the Bill.
The Bill states further that,
… the Commissioners shall require proof of the country in which goods originated in relation to any duty under this Act in the case only of goods exported from such countries as the Board of Trade may direct in relation to that duty.
It seems to me that that implies that it is only when the Board of Trade says to the Commissioners of Customs and Excise, "We want you to check on such and such an import coming into the country under this Act" that the Commissioners will do anything about it. I should have thought that the moment the Bill became an Act the Commissioners would automatically check everything to which the Act could apply, whether or not the Board of Trade decided that there was a special risk.
I say that because when we had the great potato trouble last year one of the difficulties of the Potato Marketing Board, which had only just got under

way, was that Customs and Excise information was far too out-of-date to be of the slightest use. The more we can gear up the Customs and Excise to keep a steady watch so that at any moment the Board of Trade can be supplied with information the better. There is too much slow-motion in the Bill as drafted, even if we are prepared to use it.
The time is coming when we shall have to go right back to a policy of full protection again. The Bill moves slightly in the right direction and for that reason I am glad to welcome it, but I ask my right hon. Friend for an assurance that it is not the intention that the Bill should be the last refuge to prevent the British grower from going under. I want it used as a deliberate instrument of policy to deter from this country stuff which comes in at far too low a value and competes unfairly with what is produced at home.
The real issue underlying every speech made in this debate has been the question of relative wage rates. By this Bill we are trying to ensure that the standard of living of those who do the work in this country should not be reduced, and that the work they do should not have unfair competition from those who are being paid far less. Although this Bill has been designed to prevent our people being damaged, it may mean that some people will have to pay more for their food. However, I would rather see that spread over the whole population than see one industry unfairly competed against simply because the Conservative Party had forgotten its tradition, the tradition of protection.
I do not say that because Joseph Chamberlain was the first person to say it, but because nothing is good just because it is old and nothing is good just because it is new. What matters is whether it is necessary and whether it works. Protection is necessary, it has worked, and until we have it again the economy of this country will not be right. I welcome the Bill.

7.51 p.m.

The Minister of State, Board of Trade (Mr. Derek Walker-Smith): We have had a useful and informed discussion on what is inescapably a technical and complex subject. The majority of the House in all quarters are clearly in favour of the


general principle of the Bill and clearly favour action to safeguard against dumping and subsidies. It is true that the Liberals, in the person of the hon. Member for Bolton, West (Mr. Holt), appear on this occasion, as so often, to be the exception that proves the rule. I do not think that the hon. Gentleman has been quite consistent, because he has now tabled an Amendment for, in effect, the rejection of this Bill, whereas on the occasion of the debate on the Ways and Means Resolution on 19th November he said that the Bill had his qualified support. So the hon. Gentleman appears to be exercising the feminine prerogative of changing his mind but he does not get the feminine prerogative of the last word; for, if he should press his opposition to the Division Lobby, I do not suppose that he would get much comfort therefrom.

Mr. Holt: The Minister has been a little less than fair to me because on that occasion the Bill was not before us. What we were debating was the Motion moved by the Financial Secretary to the Treasury, and I specifically made my provisos with regard to what the Bill contained. If the right hon. and learned Gentleman will read what I said on that occasion, he will find that I said in principle exectly what I have said today.

Mr. Walker-Smith: I do not want to enter into a detailed controversy with the hon. Gentleman, but he said:
Inasmuch as these duties are intended to be used to stop other people continuing undesirable trade practices, I give them qualified support, but for my part I shall watch the use of these duties by the Government with a wary eye."—[OFFICIAL REPORT, 19th November, 1956; Vol. 371, c. 1444.]
I should have thought that made it clear that the hon. Gentleman favoured the permissive powers which are proposed in the Bill, but would scrutinise their exercise, as he put it, with a wary eye.
At any rate, the majority of the House have expressed their support for the broad principle of the Bill, and in various speeches many interesting points have been raised. They group themselves broadly under these heads: first, questions as to whether it is right to take these powers at all, especially in view of our European free trade area negotiations. Secondly, assuming that it is right, whether the machinery proposed is effective and practicable. I think that most

hon. Members who have addressed the House have referred to that question, from the right hon. Member for Smethwick (Mr. Gordon Walker) at the beginning of the debate, to my hon. Friend the Member for St. Albans (Mr. J. Grimston) and my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke), who have spoken recently.
Then there was the somewhat allied question, raised by a number of hon. Members, as to whether the machinery of the Bill is appropriate: namely, whether the powers given to the Board of Trade are too wide or, as the right hon. Gentleman put it, too discretionary, or whether they should be qualified by some judicial or quasi-judicial scrutiny.
Lastly, much of the debate has turned on whether the Bill is wide enough in its drafting to catch various specified practices which, it is alleged, are injurious to the economy of this country or to parts of it. So perhaps, Mr. Deputy-Speaker, I may address myself to the observations of hon. Members under those four heads.
In the first place: whether the powers taken by the Bill are proper, especially in the context of what we are now seeking to do in Europe. My right hon. Friend the President of the Board of Trade dealt with that question in his opening speech. Of course, in our negotiations for the free trade area we shall expect to preserve the right to apply anti-dumping and countervailing duties consistently with any internationally agreed rules. As regards subsidies, we shall obviously continue to work for their elimination in the context of the free trade area, just as we do already in the context of the G.A.T.T. and O.E.E.C.
Various references have been made to the fact that other nations have already got these powers and that we are, therefore, not doing anything which could invite retaliation by the act of taking the powers: we are simply catching up with what other countries are already doing. The right hon. Member for Smethwick said it was important that this Bill should not be an instrument of disguised protection. On that I would echo what was said by my hon. and gallant Friend the Member for South Angus (Captain Duncan) in his most interesting speech, in which he pointed out that competition, though it should be vigorous, should not be vicious. I


suggest that it is false logic to suggest that the Bill is in any way hostile to a vigorous, competitive approach by industry. After all, the fact that one takes steps to avoid being kicked in the stomach should not be taken as evidence of any lack of enthusiasm for keen competition under the Queensberry Rules.
So I think I can leave the first question, whether we are derogating from our principles in taking these powers, by saying that we are doing what other countries are doing already; we are doing what is permitted by the G.A.T.T., and we are not seeking to use these powers in any way to blunt the keen spur of legitimate and proper competition.
Now I come to the second broad matter: the question of the practicability and effectiveness of these powers. I will deal first with the point put just now by my hon. Friend the Member for St. Albans. Why are these powers simply permissive and not mandatory, as in the case of Canada? Canada's powers, of course, are some of the oldest, dating back in origin almost to the beginning of the century, and certainly well before G.A.T.T. G.A.T.T. does not permit the imposition of anti-dumping or countervailing duties in the absence of material injury or the threat of material injury. As hon. Members have pointed out already—and I will come to this question again in that context in a moment—there is not an express provision about material injury in this Bill.
Where we are dealing with other G.A.T.T. countries, which represent 80 per cent. of our trade, we shall, of course, have to abide by the material injury provision, not because it is in the Bill, but because it is in G.A.T.T. However, in the case of the other 20 per cent., it may be advantageous not to be bound by that provision. By making these powers permissive and not mandatory we are able to leave out of the Bill a specific reference to the material injury requirement, and that gives us a more flexible instrument for dealing with dumping and subsidising countries which are not contracting members of G.A.T.T.
The right hon. Member for Smethwick asked—it is a basic question—whether the definition of "dumping" in the Bill is right. The definition results from a

comparison of two defined prices, the export price and the fair market price. In effect, the right hon. Gentleman gave himself the answer when he pointed out that we are adapting definitions based on the internationally accepted rules and that we could not in any event deviate from them. What we think, and hope, we have done in the definitions which we have written into the Bill is to get a more flexible method of dealing with the subject than we had in the Safeguarding of Industry Act, 1921, where the somewhat more rigid framing of the formula was one of the reasons which made the Act inoperative and caused it to be revoked.
The next series of questions fell under this broad category: is the procedure effective and practical? My hon. Friends the Members for Clitheroe (Mr. Fort) and Middleton and Prestwich (Sir J. Barlow), both of whom speak with authority on these questions, asked for an indication of how the procedure would work in practice. As my right hon. Friend has said, the Board of Trade can itself initiate action, but ordinarily, and obviously, the action will be initiated as a result of representations from aggrieved industries or companies.
The procedure that one would contemplate under the Bill would be something like the following. First, the industry or company affected would make an application to the Board of Trade asking for an order in regard to a specific matter. The Board of Trade would then furnish it with a document showing the relevant data to be established by the industry according to the criteria specified in the Act. The complainant would then assemble his evidence and submit it to the Board of Trade. It would then be for the Board of Trade to decide, first, whether a prima facie case of dumping had been established, and, secondly, whether there was any evidence of material injury, which, as I have explained, would, in the case of G.A.T.T. countries, still be relevant.
If the answer was that there was no prima facie case or no material injury, the matter would lapse. On the other hand, if a prima facie case were established, there would then probably be some procedure for the advertising of the application with a view to giving other interested parties the right of objection


before the Board of Trade made up its mind whether there was a case for an Order. Then, under Clause 1, the Board of Trade would have the duty of making its decision in the broad context of the national interest.
My hon. Friend the Member for Middleton and Prestwich and others asked me what constitutes "the national interest." I should say that one of the matters which would have to be taken into account is the question of material injury. The hon. Member for Farnworth (Mr. Thornton) thought that it ought to be written into the Bill. I have dealt with that point in reply to my hon. Friend the Member for St. Albans, but in the generality of cases that would be one of the things which would have to he taken into account. With all respect to those who have suggested a definition of "national interest," I do not think that the national interest is susceptible to definition. To the best of my recollection, no attempt has ever been made to define it in a Statute. The safeguard is that all these Orders require an affirmative Resolution of the House of Commons, and the best judge of what is the national interest at any time is the House of Commons.
The right hon. Member for Smethwick criticised this procedure by saying that the discretionary powers of the Board of Trade were too wide. The hon. Member for Bolton, West described them as "semi-dictatorial powers", but they are certainly not that. It would certainly not be possible for the Board of Trade to do what the right hon. Gentleman rather suggested it might, which would be to use its discretion to convert these antidumping and anti-subsidy provisions into a general protectionist instrument.
The Board of Trade would be under a statutory duty as defined in Clause 1. It could act only if it appeared to it that certain conditions were satisfied. If it acted outside that it would not be acting in good faith, and it would be subject to the usual supervisory control of the courts, which runs against Government Departments which either exceed their statutory powers or operate them in bad faith. The right hon. Gentleman has exaggerated the possibilities of what could be done in that context. It is our intention to use the Measure only for what it is intended, which is to deal with the problem of dumping and subsidies.
As to the actual operation of the procedures, both the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and my hon. Friend the Member for Middleton and Prestwich urged the setting up of an advisory panel or committee of some sort to assist the Board of Trade in the duties which will be placed upon it by the Bill. It is true that under the 1921 Act there was an advisory committee of five persons who were required to be experienced in trade and industry. The trouble about having such a body is that it slows up the procedure. It is difficult enough to find members for such committees, but that is only the smaller part of the difficulty; as these persons are not whole-time members, a much greater difficulty is to assemble them quickly at a time convenient to them all.
Various hon. Members have rightly referred to the necessity for speed. My hon. and gallant Friend the Member for South Angus referred to it in connection with cases of the dumping of surplus crops and stocks. Perhaps I might here answer the question asked by my hon. and gallant Friend the Member for the Isle of Ely. The phrase "goods of any description" has a very wide connotation which includes the horticultural products with which he was concerned. In that context, and many other contexts, speed is of the essence. One has to bear in mind that if one had an elaborate procedure to assist the Board of Trade the procedure would be slower, and the slower the procedure, the greater the risk of forestalling.
What we have really tried to do here is to seek the highest common factor of a reasonable maximum speed to prevent forestalling with a fair and thorough examination of the issues such as we would ourselves expect in other countries and such as we ought to practise in our own tradition of fairness and to avoid retaliation or ill will.
The next points raised were those on Clauses 5 and 6. Clause 5 is the Clause which prescribes the machinery for getting information after the making of an Order. It gives certain powers to the Commissioners of Customs and Excise. My hon. and gallant Friend the Member for the Isle of Ely thought that perhaps those powers should be wider than they are, and the Customs should exercise a broader jurisdiction in this matter.
Of course, he will see in studying that Clause, that it is imposing obligations upon importers. The reason for the proviso on the top of page 5 of the Bill, which he queried, is to limit the area to those countries which are relevant to an inquiry into a particular imported article. What we do not want to do in this context is to place burdens on importers of such a sort as to impede or slow down the normal, legitimate processes of trade.
On Clause 6, my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) put to me a point in regard to the ascertainment of the export price. Clause 6 defines the export price as the f.o.b. price, that being, in our view, the true yardstick of comparability with the overseas domestic price. He asks whether it is a wholesale or retail price which is to be compared. The answer is, if my hon. Friend will be good enough to look at the concluding words of Clause 7 (2) that:
…adjustments …"—
can be made—
whether for differences in conditions and terms of sale, for differences in taxation or otherwise, which may be required for the purpose of ensuring that the comparison between the fair market price and the export price is effectively a comparison between the prices on two similar sales.
Therefore, in each case there will be a proper, effective comparison of like with like, in the comparison of the export price and the fair market price.
I turn to the fourth main head—the various practices which have been referred to by hon. Members, who have queried whether they are within or without the operation of the Bill and whether they should be. Of these practices, the first which was referred to by the hon. Member for Farnworth and certain of my hon. Friends and by the hon. Member for Ashton-under-Lyne was on the question of low-cost competition generally. I must answer by saying that this Bill is not dealing with that because mere low-cost competition in a general context does not satisfy the criteria either for dumping or subsidies which are prescribed in the Bill. Whether there ought to be action in regard to that is another and wider matter which can be discussed on some convenient occasion, but clearly it would not be within the ambit of the Bill.
The next specific practice is this rather difficult matter—at least I find it rather

difficult—of Clause 8, which was raised also by the hon. Member for Ashton-under-Lyne. The definition given in Clause 8 really amounts to this: a country is not a country of origin, despite the fact that goods have undergone processes there, if 25 per cent. or more of the cost of production is due to processes after it has left that country. The principle which we have sought to follow in the Bill is this: to allow the imposition of duties on those goods which are merely vehicles for the import of other dumped components into the United Kingdom, but to exempt goods where the processes have substantially transformed the components into a new or different article. There is no magic in the figure of 25 per cent., but I think that 25 per cent. represents a substantial transformation by the processors and it is, of course, the same figure as used in the Safeguarding of Industries Act, 1921 and it is also the figure, as the hon. Gentleman so well knows, which is normally taken to determine questions on Imperial Preference.

Mr. Rhodes: I was not being really critical about it. I was trying to be constructive in that if we can settle this point we shall save ourselves a lot of trouble when we get closer to the European common market about the value that is put on goods imported here and then processed. I should like the Department to look at it again.

Mr. Walker-Smith: Of course we always give very careful consideration to anything that the hon. Gentleman, with all his experience of these matters, is good enough to suggest, and perhaps we can have another word about this at or before the Committee stage.
The third practice which has been referred to by many hon. Members is the Indian practice in regard to cotton. On that, whatever the rights and wrongs of this matter, it is not really a matter open to us now in this Bill because the Ways and Means Resolution has in fact been drafted so as to exclude the possibility of incorporating those practices into the Bill.

Mr. F. Blackburn: Why?

Mr. Walker-Smith: The hon. Gentleman asks me "Why?" It is a very fair question but let me point out this to him. The House did it with their eyes open


when they accepted the Ways and Means Resolution. My right hon. Friend the Member for Blackpool, North (Mr. Low), who was then Minister of State, Board of Trade, and, if I may say so, whose great talent and knowledge of this subject as a Minister will be a great loss to the Government and the Board of Trade and who would certainly have done this task much better than I, made it quite clear to the House that that would be the effect of passing the Ways and Means Resolution. The House accepted it on that information and in that spirit; so I do not think that I would be in order in going into that question. All I would say is that the reason for it, if I may answer the hon. Member for Stalybridge and Hyde (Mr. Blackburn), is that we have parallel practices, as has been mentioned, in regard to our steel industry, etc.; and we cannot really, although the hon. Gentleman the Member for Ashton-under-Lyne seems to suggest it, do one thing in regard to the Indian practice on cotton and take a quite different attitude in regard to our own practice in respect of steel here at home.
The next special practice was about surplus crops and particularly the United States surplus stocks to which the hon. Gentleman referred. It is difficult to comment in general on a variety of practices like that, but prima facie the powers conferred by the Bill would be capable of use against certain categories of surpluses but it would have to be done consistently with our G.A.T.T. obligations and particularly concerning the one about material injury to which I have already referred.
My hon. Friend the Member for Kidderminster (Mr. Nabarro) raised the topic of Belgian carpets. I had the misfortune not to be present when he was speaking and now he has elected to have the good fortune to absent himself while I am speaking. As it may be that the rest of the House does not share the enthusiastic interest of my hon. Friend in Belgian carpets, I can deal with him on a more informal basis.
The last series of practices to which the hon. Member for Ashton-under-Lyne and one or two other hon. Members referred were the French and Italian practices. The French practice, where the French Government remits social

insurance taxes in respect of exports, is a clear case of an export subsidy not only in relation to the Bill, but also in relation to G.A.T.T. The subsidy is not defined as such in the Bill, nor is it in G.A.T.T., but hon. Members may take it that this practice is covered by the Bill just as it is by G.A.T.T.
The Italian practice to which the hon. Member for Ashton-under-Lyne referred—he was good enough to tell us about it earlier, after his visit to Italy—is that which is found in the arrangements in the Prato district near Florence, which is a method of organising industry adopted by employers to minimise their liability for tax. Tax avoidance in that way could not be regarded as a subsidy by the Italian Government. If I may say so from my short experience at the Treasury, it would not be normal for Governments to welcome tax avoidance, and I do not think that the Bill would cover that practice.

Mr. Holt: Would what the right hon. and learned Gentleman has said about the remission of tax on goods from France apply, for instance, to remission of the German turnover tax which is now widespread on all exports? The remission of turnover tax is about 6 per cent., which the Germans argue is not really a subsidy, but something similar to our Purchase Tax.

Mr. Walker-Smith: I am not sure whether the operation to which the hon. Member is referring is the one which under agreement with us has been discontinued in Germany. Perhaps he will allow me to look into that and to have a word with him about it.

Mr. G. M. Thomson: Can the right hon. and learned Gentleman say whether the French and Belgian habits of concealed subsidies on jute goods will come within the ambit of the Bill?

Mr. Walker-Smith: It is a little difficult to give an off-the-cuff answer, and as a lawyer I am always cautious about doing that, even on matters far simpler than the jute industry. I would rather not reply without looking more carefully at the facts, because undue weight might be attached to the answer, it having been given in the House.
I think that covers at all events the main points which have been put in


the debate. Not even the strongest optimist would hope that a Bill having the obvious difficulties of definition and application of this Bill and having to take into account so many legitimate interests could give universal satisfaction to all people at all times. I am very grateful to the House for recognising those difficulties and appreciating our good intentions and for making so many valuable and interesting comments upon the Bill; suggestions to which we shall, of course, give full weight. I am sure that we can all co-operate in Committee to make any improvements which are both desirable and practicable. Meanwhile, I ask with confidence that the House give a Second Reading to the Bill.
Question, That "now" stand part of the Question, put and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Bryan.]

Committee Tomorrow.

Orders of the Day — TRANSPORT (RAILWAY FINANCES BILL)

As amended (in the Standing Committee), considered.

Clause 4.—(SUPPLEMENTARY.)

8.28 p.m.

Mr. G. R. Strauss: I beg to move, in page 5, line 9, to leave out Clause 4.
Of course, we really do not want to delete this Clause but to get an explanation from the Minister to clear up some of the confusion which was created in the minds of all hon. Members in Committee during the concluding stages, partly perhaps because we were a little hurried and partly because none of us, including the Minister, had given sufficient thought to the problem. The Minister added rather than detracted from the confusion in which the Committee found itself, and he himself asked for an opportunity to clear up the difficulties which surrounded this question and we now give him that opportunity.
The purpose of the Bill, as is well known, is to enable the British Transport Commission to tide over the next few years when it will be in particular financial difficulties owing to the modernisation scheme and to the large amount of capital, which in the early stages will not fructify, which it will be called upon to spend. The purpose of the Bill is to enable the Commission to capitalise the interest on the capital needed for the modernisation plan and to put in a special account and get a loan to provide for the deficit which is likely to face the Commission during these coming years.
The problem arises—I am not sure that it is serious—in making these calculations, what is the definition of "British Railways"? What should it include and what should it exclude? We are told in Clause 4 that included in the calculations for determining the deficit of the railways during these years will be the collection and delivery by road of goods for the railways; the generation of electricity for the railways, and possibly other things as well.
We were all quite happy with that definition, until the hon. Member for Truro (Mr. G. Wilson) moved an Amendment to the effect that the shipping


responsibilities of the Commission should be excluded from the calculations of the railways' deficit, and the Minister said that that was what he intended to do. Then many of my hon. Friends and myself said that that was surely ridiculous. We said that shipping was part of the British Railways service. If a man buys a ticket from London to the Isle of Wight and goes on the ferry to the Isle of Wight it is nonsense to suggest that that part of the journey between Southampton and the Isle of Wight is not part of the railway service. There was a little heated argument upon this point. Then my hon. Friend the Member for The Hartlepools (Mr. D. Jones) mentioned some even more striking examples, and the Minister made certain observations.
8.30 p.m.
Having given the matter some consideration meanwhile, I have come to the conclusion that it really makes not the slightest difference whether shipping is included in the calculation—unless the shipping service makes a substantial deficit, which it is very unlikely to do. At the moment it is making a profit of about £2 million a year, and we hope that it will make more. In any case, any profit made by any other service run by the Commission is deducted from the railway loss before the loans are made by the Government to the Commission in respect of that loss, and any profit made by any other service is deducted from the amount which the railways can put to special account meanwhile. It therefore seems to make no financial difference whether or not shipping is included.
We were led to believe by some statements of the Minister, however—I do not blame him; it may be that he had not given this matter such full consideration as he has other aspects of the Bill—that there was to be some splitting between the shipping and the railway aspects of the work of the Commission. I should like to quote a few sentences from the report of the proceedings in Committee. The Minister said
There will be circumstances where there is a mixed operation, of a train ferry or something of that kind, where an element of shipping must fall within the Commission's revenues, but if we tried to put that down in detail in the Bill we should never come to an end. Where a shipping service is playing some part in contributing towards the

Commission's railway services that will be taken into account, although that will be difficult. We shall have to make an assessment of what contribution is made by the railways, which are the chief loss-makers of the Commission, and what part should be dealt with as purely shipping services."—[OFFICIAL, REPORT, Standing Committee B, 18th December, 1956, c. 46.]
That suggests that in making these calculations there will be some splitting—a word which the Minister used later in his speech—of the revenue which comes from the shipping services, as between the shipping services proper and the railway services, in ascertaining the real deficit of the railways.
The Minister later said that that splitting would be exceedingly difficult, and that he was not looking forward to having to do it. If he tells us that the shipping finances, as defined and reported annually by the Commission in a separate account, will remain intact and be treated exactly as they are in these yearly accounts, and will be excluded in toto from calculations of railway finances, I can understand it, and there would be some sense in it. But if he says that some part of the shipping finances will be carried over into the railway finances I shall want to know where that will begin and where it will end.
That is what he indicated would happen, and it is in order to enable him to enlighten us upon the matter, and to give him an opportunity of telling us what is really intended and what the Bill proposes, that this Amendment is being moved.

The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): I agree with the right hon. Gentleman that at the time when this matter arose in Committee both sides had been co-operating very well in order to try and finish the Committee stage at that meeting, and that the House ought to have a further explanation of this matter. I am therefore very grateful for the opportunity of trying to make it a little more plain.
The first thing that I ought to make plain—and I do not think that the right hon. Gentleman and his hon. Friends will disagree with this—is that, apart from the quite strict discipline which the Bill places upon the Commission, I am naturally anxious, as is my Ministry, to help the Commission as much as possible in what we all know is going to be a difficult


enough job, so that it may get on its feet. Therefore, in these matters, so far as it has been possible or proper for me to do so, I have always tried to meet the wishes of the Commission and to carry on wherever possible the various practices to which it has been accustomed.
I do not want to go into the arguments about the various interpretations of what I did or did not say during the Committee stage debates, but I should like to remind the House, as appears in column 47 of the Standing Committee Report, that I said:
It might help if I said that this was done at the express wish of the Commission."—[OFFICIAL REPORT, Standing Committee B, 18th December, 1956, c. 47.]
The fact is—I think this is the first important fact which is relevant—that the Commission always has kept its shipping receipts and traffics separate from its ordinary passenger and goods traffics. As I said at the time, it is not always an easy thing to do, but at least it is a matter of quite long precedent. In the Eighth Annual Report and Accounts for 1955 on pages 184 and 185—and as far as goods traffics are concerned on pages 194 and 195—there are clearly set out passenger receipts and traffics for ships, and the freight receipts and traffics for ships. I will refer to this again in a moment, but I wish to make the first point that the Commission has always separated those matters in its accounts.
I understand the Commission separated them as a matter of convenience, and it is not improper for me to study that in trying to meet the convenience and established practice of the Commission. I did say that where the shipping service is playing some part in contributing towards the railway services of the Commission, that would be taken into account. I did say that, as the right hon. Gentleman has said, it would be difficult, and perhaps that has led the House to think that this is some new thing which I should have to determine under Clause 4 (4), which is That part of the Bill dealing with matters which cannot be settled in other ways and come to the Minister to be determined. If the blame lies with me, I will accept it, but the position is far less complicated than my remarks, and indeed the debate, suggested in the closing stages of the Committee discussions.
The established practice of the former main line railway companies which the Commission followed—and that is why there is much precedent for this—was to keep the accounts of their shipping activities entirely separate from the railway activities. As I have said, they are set out in the current report. On page 185 there is a footnote which states, in the words of the Commission:
The statement shows all receipts and traffic carried in ships operated by the Commission, irrespective of whether the traffic is through-booked with British Railways or not.
That is the first thing, that for some years there has been a clear separation of shipping from ordinary railway traffics.
Perhaps I may go on to explain that the ships account includes the receipts and expenditure on craft operated by British Railways used for the conveyance of traffic. Where traffics conveyed and rates and fares include rail and sea traffic throughout the charges are apportioned—this is what I meant by the split—and both activities are credited with their respective portions. In other words, there is a split between rail and sea portions on through tickets, for example, to the Continent. Similarly, expenditure on shipping is kept separately from expenditure on railways. On train ferries it is apportioned in the same way, except that the cost of track inside the ship is rightly treated as part of the cost of the ship. So there is that clear practice and there is nothing new in it. In fact, I believe it started in 1913.
Therefore, I do not think—and here, if I misled the Committee I apologise—that I am likely to be asked to determine any matter arising from that under the provisions of Clause 4 (4). An Amendment which attempted to write that into the Bill would, I am advised by the Commission, be very inconvenient to it, because there is this well-established practice and no new complications are likely to arise. The Commission does not want its form of accounts—although they are perfectly satisfactory to the Ministry and to the Commission at the moment—to be frozen by writing them into the Bill. So I do not think that adding, the existing practice to the Bill would do anything to aid the Commission or give any advantage to it.
The hon. Member for The Hartlepools (Mr. D. Jones) said that the Clause did not appear to run on all fours with, for


example, the collection and delivery services. I do not think there is anything illogical about it. After all, those services are confined to traffic which, in the end, will be carried by the railways for some part of the journey, while the shipping services are open to everybody, some people go on British Transport Ships having come by road and others having come by rail.

Mr. David Jones: What about the case of a train ferry that carries a train except for the engine? Is there a clear distinction about paying the wages of sleeping-car attendants while they are sailing across the Channel? The vessel which I mentioned in Committee was specially built to carry railway coaches. Does that mean that the men are treated differently?

Mr. Watkinson: The hon. Gentleman is really making my case. It is only fair to say that I drew attention in the Committee to these difficulties. I have explained that there is a clear division. The accounts are separately brought forward. We must leave decisions on that kind of detail to the Commission. All I have to be satisfied about is that what we are doing in the Bill is most convenient to the Commission. I am quite happy to leave to the British Transport Commission and British Railways the decision as to who pays the dining-car attendants. We shall not improve the Bill or help the Commission if we try to write that sort of distinction into the Bill.
The hon. Member said that the collection and delivery services did not run on all fours with the Clause. If vie could make a case for including the whole of the shipping services in the Bill we could make a case for including the whole road-passenger service. We should broaden out the Bill into serving quite a different function from that for which it is designed, which is, as the White Paper said, to deal with the railway situation. I am anxious to keep it in that field and so is the Commission.
In Clause 4 we use the method of apportionment which the Commission took over from the railway companies and with which it is satisfied. It has told me, and I have personally spoken to the Chairman about it, that it would not wish this matter done in any other way. It is therefore right to leave matters as they

stand. If anything unforeseen should arise in which some decision must be taken by the Ministry or by the Minister I have reserve powers in subsection (4) to deal with it. So far as I can see those powers are not needed in this matter. The split is clearly made the apportionment is decided by the Commission, which has told me that the Clause meets its convenience and meets operating efficiency.
I hope that the House will agree, after that explanation, to leave the matter as it stands and to accept that the division which the Commission makes between shipping services and railway services is right and should be left as it is.

Mr. G. R. Strauss: In view of the explanation we have been given, which we think is absolutely sound, and because we agree with it, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.45 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent): I beg to move, That the Bill be now read the Third time.
It may be for the convenience of the House if I formally move the Third Reading so that my right hon. Friend may reply in detail to the debate.

8.46 p.m.

Mr. D. Jones: There is a phrase in railway jargon which describes a new entrant to the service as "learning the road". We are perfectly willing on this occasion to regard the hon. Gentleman as learning the road, but I warn him, while congratulating him on his transfer to this Department, that he is leaving the quiet amenities of the countryside and coming into the hubbub of the marshalling yard. I can assure him that most of his time will be spent in the marshalling yard dealing with problems there and not in travelling in the well-lit and comfortable expresses which, one surmises, are on our main lines.
We have got to the end of this Bill so far as this House is concerned. It is a Bill which seeks to help the British Transport Commission to overcome its difficulties. Within the last few months I have been reading a very voluminous and


interesting document published by the International Union of Railways. So far as I could see, this problem of deficits in railway revenue is not peculiar to British Railways but is applicable to at least every railway system in Europe, and probably in the other continents as well. Therefore, I do not think that we should be too much concerned about this problem, except that it requires to be put right as quickly as possible.
During the Second Reading of the Bill, the then Joint Parliamentary Secretary, in the concluding stages of his speech, said that the trade unions concerned with the railways accepted the Bill. That has since been qualified by the trade union leaders as being "only so far as it goes." They agree that it does not go nearly far enough to solve the problem of the railways. I wish to address one or two questions to the right hon. Gentleman about the Bill. He will remember that it arose out of a review of the financial situation which was embarked upon by the British Transport Commission. That review was finally submitted to him, and it was issued by him in a White Paper in October, 1956, in which he reproduced the views of the Commission and included a preamble expounding the view of the Government.
In making an estimate of the consequences of its financial circumstances in a number of years ahead, the British Transport Commission went into considerable detail. In the beginning of its document—in page 11 of the White Paper—it laid down five conditions. It said that it based itself on certain assumptions on other matters outside its control. The first major assumption was:
That the Commission will not be prevented from adjusting their charges without delay at any time to cover increases in costs, should they consider it expedient to do so.
I should like to know tonight whether the Minister accepts that assumption without any qualification. Is the Commission to be entitled, without any interference from the right hon. Gentleman or any successor, if it so decides, within the ordinary terms of the Transport Tribunal, to raise its charges at any time to cover increased costs and without any of the kind of interference which it experienced last March?
The second assumption was:
That the Commission will be free to operate on flexible systems of charging and to determine on a reasonable basis the scale and scope of the services to be provided.
If I understand the English of that assumption it is that should the British Transport Commission decide to withdraw services, to close down branch lines or to reduce services in parts of the country because it is unable to afford the loss incurred in operating such services, it shall be perfectly free to do so without any political consideration and without any interference from the Government of the day. My understanding is that unless these assumptions are guaranteed, it means that all the financial calculations made by the Commission in this document on which the Bill is based fall to the ground.
The third assumption was:
That the necessary resources of all kinds will b.2 available to enable the Commission, in co-operation with industry, to carry out their Plan for the Modernisation and Re-equipment of British Railways according to programme.
If I understand that assumption, it is that unless all the steel which the British Transport Commission considers is necessary for the building of locomotives, coaches, bridges, railway tracks or any other work in connection with the railways is available, and all other materials are readily available, that assumption is not satisfied. If, in that event, the assumption is not satisfied, the figures on which those calculations are based will be null and void. The other two assumptions are important, but I think that the principal assumptions are those that I have mentioned, and I should like the right hon. Gentleman to tell us tonight precisely what he understands these assumptions to mean.
I turn to another point, which deals with the deficit in relation to the London Transport Executive. A few moments ago, we were discussing the division of activities between the railway side and the shipping side of the Commission's work, but there is another part of the Commission's activities which is important and which is referred to in the British Transport Commission's Report If my understanding is correct, Sir Reginald Wilson, in giving evidence some time in the past before the Transport Tribunal, on behalf of the British Transport Commission, made an assessment of


the proportion of central charges which are applicable to the several parts of the Transport Commission's various undertakings. He assessed the share of the railways at 71·17 per cent., and he assessed the London Transport Executive's share at 10½ per cent.
My calculations, based on the figures that are available to me, are that, at the end of 1955, on that assumption of 10½ per cent., the London Transport Executive was £27·8 million in deficit in regard to its contribution to central charges between 1948 and 1955. The Executive contributed a sum of roughly £17·2 million, and the total was £45 million, so that there was a deficit of £27·8 million.
In the White Paper to which I have referred, the Commission itself makes reference to the London Transport Executive, and says that because of the circumstances surrounding London's traffic, there is very little possibility of the total revenue derived from fares collected on either surface or underground services in London increasing. Indeed, the Commission goes on to say that, quite conceivably, over the years, revenue may decrease, and that there is no very great possibility of the revenue increasing.
If that be so it seems to me that there is a distinct possibility of the deficit of the London Transport Executive to the central charges fund increasing year by year. As the other services have to be hived off, does one understand that the London railways are to deteriorate, or is additional capital to be found to keep them up to modern standards? Alternatively, is some other formula to be found to cover the deficit which must of necessity arise on the operations of the London Transport Executive?
I turn to another question. Earlier, in reply to the Amendment moved by my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss), the Minister referred to the passenger services. When the Act became operative on 1st January. 1948, the four main-line companies had substantial holdings in road passenger transport services. They amounted to about £10 million. The interests in those services were bought with railway capital. I understand that they are still chargeable to the railway account.
The Transport Act, 1947, by Section 3, made it obligatory on the Transport Commission to run all its businesses as one

undertaking. Therefore, because the whole of the ramifications of the Commission have to be treated as one business, the fact that the road passenger services were paid for initially by railway capital does not matter, except from an internal accountancy point of view. But if the provincial road passenger services are now to be treated as an independent concern, and if any profit which they may make is to be denied to the railways, what happens to the investments which are chargeable in the central charges account to the railways? That seems unfair.
Either the central charges fund ought to be rid of the cost of the acquisition of the road passenger services or, alternatively, the railways should have some benefit from the advantages which might accrue from the operation of those services.
Finally, I should like the Minister to tell us what he estimates is likely to be the charge in the years from 1962 onwards on the central charges fund. I calculate that it will be between £100 and £120 million, and it may well be more. About half a million people are employed in the railway service. If they see an ever-increasing burden, to which the railways have to contribute by finding the necessary money to meet these charges which are now being placed on them, that will not be a very great inducement to them to exert their energies to make the system the kind of system which we want to have. Therefore, I would ask the right hon. Gentleman if he can give us any idea what, for example, the cost to the central fund will be in 1963, 1964 and 1965.
It is vitally important that the employed in the industry should be given the necessary encouragement. We can modernise the railway system as much as we like, and provide the railwaymen with the most up to date equipment, but unless we can win and hold their good will the chances that the railways will become assets of which we can be proud will be small indeed, and the railwaymen need all the encouragement which they can get in the years that lie ahead.

9.0 p.m.

Mr. A. J. Champion: My hon. Friend the Member for The Hartlepools (Mr. D. Jones) welcomed the Joint Parliamentary Secretary to this debate and to our debates on


transport matters. In his last job, when the hon. Gentleman was Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, it fell to my lot from time to time to cross scythes with him. Then he was on his own dung-hill. He now comes to transport, and now, I suppose, he and I will from time to time cross shunting poles. Now that he has come on to my track we shall deal with him suitably, I am sure.
In Committee we of this party moved an Amendment to Clause 1 (1) because we thought that the three years prescribed for the accrual of interest was not long enough. I was hoping that today we should be able to move another Amendment, but, unfortunately, Mr. Speaker ruled it out of order. Therefore, I cannot discuss it at length. However, in Committee the Minister promised us that he would consult the British Transport Commission about this very important matter, and I gathered then that he would take a later opportunity to tell us his conclusions upon it and all that he thought about it. I shall not develop it, as, obviously, I should be out of order if I were to do so, but I would invite the Minister to reply upon that question, which we on this side regard as an extremely important one.

9.2 p.m.

Mr. Ernest Davies: The Bill is now in its last stage in this House. Its importance should not be judged by the attendance here tonight. We are considering authorising the Government to make advances on a very large scale to the British Transport Commission. Before we part with the Bill we are entitled to ask more questions of the Minister, in view of the time which has elapsed since the White Paper was drawn up and the estimates were made, and in view of certain changed conditions.
I think it would be helpful if, in his reply to the debate, the Minister were to tell us whether he thinks that the two main proposals in the Bill are now quite adequate to meet the financial difficulty with which the Commission is confronted, and whether that has changed at all because of the fuel and oil shortage and because of the high prices prevailing due to the uncertain economic situation resulting from the Suez policy. It would be

helpful if he could assure that the modernisation scheme outlined in British Railways programme can now be carried through as planned, and that there will be no attempt to use the changed economic situation and the need for economies, which the present Prime Minister, judging by his actions when he was Chancellor of the Exchequer, seems to consider necessary, as an excuse for watering down that programme. Finally, in that connection, I should like to know whether the Minister thinks that the proposal in the Bill which limits the borrowing into which the Commission can enter to meet its deficit of £250 million plus interest will be adequate to meet the situation.
I ask the Minister these questions because it seems to me that there has been a change in the situation and it is necessary to review the estimates. The fuel tax has been increased by 1s., and the price of oil has also risen. I understand that this adds about £8 million a year to the Commission's expenses, that is, taking the British Road Services, the collection and delivery services and the other oil-consuming activities of the Commission. Since these estimates were prepared, the busmen of London Transport have also been granted a well-merited increase in wages of about £1½ million, and the locomotive engineers have had an increase which I believe will cost the Commission about the same amount. Therefore, with these increases alone a sum of £11 million per annum has been added to the cost of operating the Commission's services, and the Commission is also facing higher wage demands from other railwaymen and other employees, including the road haulage workers.
One can, of course, offset these higher costs to some extent with the changed traffic situation. Certainly, petrol rationing has brought one relief to Londoners in the improved traffic flow through the streets which has a direct effect, I presume, on the earnings of London Transport. The vehicles are more heavily loaded and are able to keep to their schedules far more satisfactorily than was the case during periods of traffic congestion. I hope that the Minister will learn the lesson and that, having experienced the improved traffic conditions in London, he will now engage on bold imaginative schemes to tackle the normal traffic congestion so that Londoners can


enjoy this improved situation permanently.
The time is not far off when it will be necessary to present to the House a modernisation programme for London Transport. When petrol rationing ends and traffic congestion returns to the streets it will be necessary to give far more serious consideration to the Route C project, to be known as the Victoria line, so that traffic taken over by the public service will be held by that service by means of more speedy travel underground. This will help the British Transport Commission's finances despite the fact that heretofore it has not been able to meet capital charges on the central charges fund.
On the other side there is disappointment at the failure of the railways to attract as high a proportion of traffic from the roads as had been expected. It appears from the Press that the response has been disappointing. It has been estimated at an additional traffic in merchandise of only from 3 per cent. to 5 per cent. on the railways. The addition in passenger traffic, apparently, is somewhat higher and may be as much as 10 per cent.
The position on the freight side is disappointing and reflects not upon the immediate management of British Railways but upon the past history of the railways. It shows that because they were starved of capital investment for modernisation and because they were unable to or failed to provide services to hold the traffics which they had in the past the goodwill of industry has been lost to a certain extent.
Apparently it is also extremely difficult, even in this period of oil shortage, to attract traffics back to the railways, since they have heretofore not provided the necessary facilities. This is relevant to the modernisation programme because it emphasises the urgency and the need for modernisation and re-equipment. It shows that in the view of industry British Railways are not able to provide the services which it requires, and therefore industrialists resist transferring their traffic from road to rail, in spite of the oil shortage and tile difficulties that accompany it, since their past experience has been unhappy. So this modernisation programme which the Bill makes possible is essential in order that the railways

can provide those speedy, regular and reliable services which will compete, we hope, at competitive prices with other means of transport.
Whether this modernisation programme succeeds depends, in my view, upon the fulfilment of the assumption made on page 11 of the White Paper concerning the provision of the necessary capital. It is gratifying to see that a large number of contracts for electrification and for other parts of the programme have already been placed. Needless to say, I am specially grateful to find that contracts have been placed for the electrification of the Enfield line, but I ask the Minister to give the House an assurance this evening that the programme is up to schedule; that is to say, that the sum of £90 million, which it was estimated in the White Paper would be spent during 1956, has been forthcoming, that contracts have been entered into for the authorisation of that expenditure, and that the Commission will be able to obtain the necessary materials and the other assistance required from the Government to carry out that programme.
I hope that now the Minister has entered the Cabinet—on which I congratulate him—he will be able to bring to the Cabinet greater force for the fulfilment of his wishes as Minister of Transport. I hope also that he will be able to add strength to the demand for the fulfilment of this year's programme, and will get an assurance that the amounts given in the Appendix to the White Paper will be forthcoming.
Another assumption, to which my hon. Friend also referred and on which a great deal of the success of the programme and the fulfilment of the estimates depends, is whether the Commission is given freedom to get on with its job, and the extent to which freedom to charge and freedom from interference in determining charges is granted to it. The assumption made is that there will be a speedy adjustment, a flexible system of charging, and an opportunity to determine on a reasonable basis the scale and scope of the services to be provided.
Our past experience has not been happy. During previous debates on this Measure we asked the Minister for an assurance that he will not again interfere with the charges proposed by the Commission as he did last year. The


response of the Minister and his former Joint Parliamentary Secretary did not give us the feeling that we could be confident that he would not again interfere.
The Government must be consistent in their approach to the Commission. They must allow the Commission to fulfil the terms of the 1953 Act, which was Government policy, and they must allow it freely to make the charges which it considers necessary if it is to be able to compete and fulfil its statutory obligations and thereby pay its way and ultimately achieve the fulfilment of the estimates which we are now considering and on which the Bill is based. If the Government refuse to leave the Commission free to make the charges which it desires, they cannot expect it to operate on a commercial basis, and it will prevent the Commission from reaching balance in 1961 or 1962, which is the aim of the modernisation scheme.
Another assumption made was that the Commission's framework should remain unchanged. We sought assurances from the Minister—he did not give them; he carefully ignored them—that he had no intention of proceeding with the disposal of any further sections of the Commission's road haulage organisation. The 1946 Act provided that there could be sold, through the company structure, the British Road Services parcels and meat companies. One understands that the parcels service is making very satisfactory profits. If those sections are to be hived off, the framwork of the Commission will have been changed and it will have greater difficulty in reaching a state of balance. The Minister should give the House an assurance that at least until balance is reached in 1961 or 1962 no further consideration will be given to the possibility of disposing of any more of the Commission's assets, particularly the parcels and meat companies.
In addition, there is power under the 1953 Act for the Minister to direct the Commission to dispose of its road passenger shareholdings where it has a majority in the road passenger companies. That represents a profitable section of the Commission's undertaking, and it would handicap the Commission in reaching a state of balance if that profitable section were disposed of. There is no justification whatever for proceeding with any

further measure of denationalisation. That is not to say that there was any justification for it in the past. However, in the light of the results of denationalisation, surely the Minister can now give us an undertaking that the Commission will be left free to carry on within its present framework, structure and organisation and will not be interfered with or deprived of any of its profitable sections.
The provisions of the Bill are necessary in order to enable the Commission to work towards a state of balance and, we hope, to reach a stage where it will be paying its way and ultimately making a surplus. Whether the provisions are adequate or not, only time will show. In the light of present circumstances and the inadequacy of the assurances given by the Minister, I have grave doubts whether it will be possible to fulfil the estimates. At the same time, one must not overlook the fact that Government policy is, of course, the cause for the necessity of this Bill. But for Government policy in changing the transport policy of the previous Government and disposing of certain assets of the Commission at a loss, the Commission would be in a far more satisfactory financial position today than it is.
I do not say that the Commission would necessarily be paying its way or making a surplus, but it would not be incurring these very heavy deficits if it had been left to continue along the lines on which it was started in 1948. This Bill is no substitute for a national transport policy, nor, in itself, does it provide a solution of the Commission's difficulties. It tides the Commission over a difficult period; it makes advances to it, but it leaves those advances as a liability. It may assist the Commission to reach a state of solvency so far as revenue and expenditure are concerned on an annual basis, although, as I have stated, that is open to doubt, but it prejudices the Commission's future by postponing the final financial reckoning.
The losses already incurred and to be incurred during the next five years are estimated at a maximum of £250 million plus the interest thereon. But that amount is to become a liability on the Commission which future users of its transport services will have to meet. It will continue to be a burden upon the


Commission's finances which will prejudice its future operation. I think that it would be far preferable to accept the fact that at least those losses made to date are permanent losses. They have been incurred and cannot be won back. Since those losses were due largely to policy decisions which were taken outside the control of the Commission, the Commission should be relieved of those losses which have already been incurred.
Finally, recent events have demonstrated once more how essential it is to have a national transport policy, and how we are suffering today from a lack of one. Abandonment of the planned transport system is the reason why this Bill is now before the House and it is only in the direction of returning to a planned transport system and not through temporary financial assistance that lies a permanent solution of the Commission's difficulties.

9.19 p.m.

Mr. Watkinson: I should first like to thank the hon. Member for Enfield, East (Mr. Ernest Davies) for his congratulations on my Ministry going into the Cabinet. I think it is a well-deserved tribute to a very great Ministry, and one which has now been recognised to have an immense importance in the economic sphere.
The hon. Gentleman said one thing which, I think, is a very fair comment on the proceedings on this Bill. He said—I think I am quoting him correctly—that on the whole perhaps this House and others interested in the railway industry had not, I will not say paid enough importance to, but perhaps had not given quite enough consideration to what is a very major Measure if we take into consideration the Commission's plans set out in the White Paper. This is a very important chapter in the long history of the railways, and, therefore, before we part with this Bill I want quite shortly to say one or two things on the general policy in answer to the points raised by the hon. Gentleman.
The Bill is the end of a long chapter of events as far as Conservative Governments are concerned. In the Government's view it is the right and logical end, and I do not for a moment accept the view of the hon. Member for Enfield, East that this plan is a sort of temporary

solution to the difficulties of the railways. It is a large and progressive plan, and if it goes well—and I will deal with that in a moment—it could be a permanent solution to the problems of the railways, and that is what the Government want it to be.
It is our view, as set out in the original White Paper, that the present organisation of the Commission is the right kind and the one most likely to ensure a profitable and efficient future. This present development, which has taken place under successive Conservative Ministers of Transport, bears no relationship at all to the original conception of nationalisation as enunciated by the party opposite. I say that in no party spirit, because controversy has been noticeably absent from the proceedings on the Bill. It is right the Government should say where we think we stand on this issue of nationalisation which has been so often debated in the House.
No doubt in the fullness of time right hon. and hon. Gentlemen opposite will define what they mean by "a national transport policy". I am sure that I do not know. At the moment the Government would like to make their position plain. It is, first of all, that one cannot make generalised statements about so-called nationalised industries. It depends entirely into what class they fall. Some have a monopoly of the services and products which they provide. Others, like the transport industry, exist in an intensely competitive field, and the Transport Act, 1947, although no doubt intended as much as possible to protect the Commission against competition, just could not do it to the extent which I believe would have secured any kind of prosperous future for the Commission.
It is the Government's view that the right way to run a competitive nationalised industry is to seek to reflect in its policies the best and most enlightened principles of both public and private enterprise, to adopt the most modern methods of management and cooperation between every section of the employees, to press forward with productivity and modernisation and to conduct itself much more like a large-scale commercial corporation than a sort of political creature subject to all the difficulties and problems of political pressures and direction.
It is fair to say that today the Commission, particularly British Railways, has been completely decentralised. Executive management is in the hands of the six general managers who are responsible to the area boards. Co-ordination is effected, as it should be, by the Commission. The area boards have been a great success and the country should be very grateful to those public-spirited men giving a great deal of time and trouble to work and serve on the area boards, particularly the area board chairmen who are daily taking a much larger share of the management of their regions—as they should be.
I do not think that this is at all funny, although the hon. Member for The Hartlepools (Mr. D. Jones) seems to find it so. We both want to see the railways prosperous and efficient, and I consider that this method of devolving their management is the only successful way to attain that end.

Mr. D. Jones: Perhaps the right hon. Gentleman will tell us of one or two of the amazing things which the local management boards have done.

Mr. Watkinson: I am telling the hon. Member that I consider that they have been a great success and that the pattern now set by the area boards, which were set up by one of my predecessors, is a success. Under the leadership of the Commission, and particularly its Chairman, Sir Brian Robertson, the railways are being run in a much more efficient and businesslike way than they have ever been run in the past.
If I may just sum up—the Government's view is that we have the right organisation for the Commission. It is working well. What this sector of the transport industry now needs is to be taken out of party politics for a time and left alone to get on with this vital job. That is what I hope the House will allow.

Mr. Percy Collick: After having imposed your own party's policy on it.

Mr. Watkinson: The question of the parcels and meat services was raised. I made the position of the Government quite clear during the passage of the relevant Bill, namely, that attempts to dispose of them having failed, they must be left alone for the moment to acquire

some background—some operating experience and some balance sheets—and there is no doubt at all in the minds of those who work in them, or in the minds of members of the Commission or even of hon. Members of this House, that they will be left alone, for the moment, as integral but separate companies within the framework of the Commission. As to the future, we must wait and see, but that is their position for a year or so.
The next point is that it was not sufficient to be satisfied that the structure of the Commission and its organisation were right. I agree with right hon. and hon. Gentlemen on both sides of the House that that would not have put the railways right. There were the arrears of modernisation to be made up—a major task; there were immense sums of money to be spent which, as the right hon, Gentleman correctly said, would show no immediate gain to the Commission, and there was the awkward fact, which the House has often refused to face—it certainly refused to do so in March of last year—that on the goods side particularly the limit of charges has been reached in many categories, and that if they are put up still further the railways will merely carry less freight.
That is an ugly fact which the House, and especially hon. Members opposite, did not wish to face nine months ago. If anyone now thinks that it was wrong, proof is coming from the complaints raised by hauliers and businesses who had, at least temporarily, to transfer their traffics to the railways and found that by so doing they had to pay a great deal more. In the Government's view we must face the fact that, at the moment, the question of charges rests not upon what the Commission or what I, as the responsible Minister, might want to do but on what the customers are prepared to pay. That is a fact which I hope the unions and managements in the railway industry will bear in mind, because it is one which no one can get over.
As to the general policy of charging by the Commission, which was raised by the hon. Member for Enfield, East, that is clearly set out in paragraphs 21 and 22 of the Government's portion of the White Paper, on page 6, which states that it is the Government's wish that the Commission should overcome its financial difficulties by taking advantage of the freedom


it has been given to vary its charges in accordance with sound commercial principles, and to relate its freight charges, wherever possible, more closely to costs. There is no doubt about the general policy on fares and charges, but the Commission must take account of the fact that it is no use the railways carrying less traffic because they are charging higher rates than their customers are prepared to pay.
As to the immediate financial outlook, we need not take the view that the present shortage of fuel—which nobody regrets more than I do—will have an overall net disadvantage to the railways; in fact the position today is rather more hopeful than the hon. Member indicated—though I appreciate that he could not know the latest figures. For example, British Railways receipts from passenger traffic during the first two weeks of 1957 have risen by over 20 per cent. compared with 1956, and receipts from parcels and other merchandise sent by passenger train are up also by nearly 20 per cent.
As regards freight, the extra coal traffics have so far been disappointing, but I think that they will come. It is a difficult thing to move a heavy commodity like coal from road to rail. But the general merchandise traffic, which is very important to the railways, has again increased by something like 10 per cent., and receipts have risen rather more because of the higher proportion of long distance traffic. If we set that fact against the heavy drop in receipts towards the end of last year and which was continued into this year, I think that there has been a very substantial shift of traffic to the railways.
Whether that will remain when fuel rationing is over and when free competition returns, I do not know. That is something which the railways must try to deal with. But it is wrong to say at the moment that the railways are not playing their part and are not carrying a very substantial increase of both passengers and freight in the present emergency. No doubt that will affect their financial results for this year and go a long way to counterbalance any disadvantages which may be suffered on the road side from increased costs. I do not think that we need feel too worried about that.
May I deal with the point which the hon. Member for Derbyshire, South-East (Mr. Champion) specifically asked me to cover, the question of whether the three-year average for the new capital assets is fair or not. Of course, it is a normal commercial practice to treat the fructifying period for every capital asset as a separate item. But that would be quite impossible for the railways, and therefore it was with the full agreement of the Commission that we adopted this average of three years.
I know that there may be arguments about the time needed to secure the full benefit from, if hon. Members wish, diesel shunting locomotives, if we have not fully modernised marshalling yards which was the point made by the hon. Member for The Hartlepools who has had vast experience. But taking one thing with another, I think it a fair average. I asked the Commission again to consider the period provided in the Bill and have been informed that the Commission think it sound and reasonable. That is some answer to the hon. Member.
As I have said, it is the view of the Government that we have set up the right structure. But that was not enough. Because of the difficulties of charging, particularly on the freight side, it was quite obvious that some special action had to be taken. Therefore the Commission came forward with its bold and imaginative plan which would have received a great deal more attention, both inside this House and outside, had not the country been preoccupied with Suez and other matters. But it is a bold and imaginative plan, and if it can be made good, the railways will change into something more appropriate to the second half of the twentieth century and not something resembling a hangover from the end of the nineteenth century.
I wish to make plain that there are other forms of transport on which it would be considered suitable to spend large sums of money. The Government might be more popular in the transport sphere were they to spend, or arrange to spend, more money on roads, and perhaps air transport, and less on railways. I should like it to be clearly understood that the decision to apportion this large sum of money from the very scarce national resources has been a difficult one to take. It is one which, regarded from pure


reasons of popularity, might have been better spent on roads or in other ways. At least, there are many people who think that we should be spending on roads amounts similar to what we are thinking of spending on the railways.
I want this great industry to realise that this plan is not a soft option for it. I do not think it regards it as such, but the position must be made plain. It is a challenge. I could not agree more with the hon. Member for The Hartlepools that if the men in the railway industry do not want to work the plan then the plan is finished. The railways will, in the end, have to be broken up, sold and disposed of. It is the men who matter; they are the people who will implement the plan and make it work.
The plan is not a soft option, not an easy thing to work out. I shall always be pressed by other interests that this money would be better spent on other forms of transport. If the railways cannot answer the challenge by making the plan work, then the whole question of disposing of these large sums of money might well have to be reconsidered.
In the past few months there has been a great gain of good will on the part of the general public, a feeling that the railways are making a come-back to what they ought to be, much higher in the industrial hierarchy. There is a feeling now that the railways are playing an important part in helping to save the country's fuel. All that good will can easily be destroyed if this plan does not work. It will work only if both management and men will co-operate as a united team.
I still think that the formation of the Railways Productivity Council might yet prove to have been one of the turning points in modern railway history. I understand from the Commission that a very large proportion of its staff can now benefit under one or more of the new productivity schemes which, it is only fair to say, have been most loyally and enthusiastically

supported by the trade unions. The Commission has a very big drive on to raise that proportion still higher.
If this plan is to succeed, all concerned must take account of the fact—this is in answer to the hon. Member for Enfield, East on wages—when considering their attitude on wage applications, that as time goes on, a higher and higher proportion of them will be able to earn extra money and sometimes, I am glad to say, very good extra money out of the increased productivity. It will not be a burden on the cost of the railways at all in the way that a direct round of wage increases would be. I am not expressing any views on current wage negotiations, which come within the proper constitutional machinery.
The proper implementation of the plan depends upon team work. I hope that the railways are prepared to put in something now in the hope of building up a more prosperous future for themselves, and for the country. If they do that, the success of the plan is assured. The railways will move forward to profitable operation and the plan will succeed, not in the interests of this Government or of any other Government but in the interests of the railways, of the men who serve them, and of the country. We cannot have a prosperous country without an efficient railway system.
I commend the Third Reading of the Bill in some of the words I used on the Second Reading. This is a great chance for the railways. I sincerely mean that. I equally sincerely mean that it is a chance that will not come again, and if all of us who are concerned cannot seize it and make a success of it the railways will have missed a chance that will never come again. Their prosperous future, which we all so much desire, will never come in our generation.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — TANKER CONSTRUCTION (FINANCE)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

9.45 p.m.

Mr. John Woollam: I wish to raise the question of whether adequate finance is likely to be made available over the next decade for British tanker construction programmes. This matter has been raised outside the House in the last few months, preeminently by the managing director of the Shell Petroleum Company, Mr. Stephens. I wish to quote from part of a very long speech he made in November. Mr. Stephens said:
I do not wish to underrate the difficulties involved in developing adequate and suitable finance for tanker construction, nor am I suggesting that the institutions should approach the problem in anything other than a strictly businesslike manner, but there is no question that tankers, although they are well defined and easily segregated assets, which are backed by firm contracts with the major oil companies, have so far not received from British institutional investors and finance houses the attention which we feel they merit as an investment, and which we feel they deserve on national considerations.
Mr. Stephens went on to say:
It is hard to see how the current level of tanker construction in this country can be maintained without the positive interest of the institutional investors through whom such a large part of the nation's total savings are nowadays channelled, and it would be of significant consequence to the British economy if we were forced one day to rely to an even greater extent on the ships of other nations merely because our financing mechanism was inadequate for the task of financing those of our own.
That speech of last November was followed very shortly indeed by two announcements abroad. One was the announcement in Amsterdam that the Royal Dutch Shell Company was financing a £23 million tanker programme for the years 1959–62 and was going to finance it by raising the money from Dutch institutional investors at 4¼ per cent. over a 20-year period.
In the following week there was an announcement from Washington that the American savings banks were prepared to enter the field of loans for ship construction, pre-eminently construction of tankers. They were prepared to do that as a direct consequence of the decision of the American Government—this is most

important and something which I commend to the Economic Secretary to the Treasury—to insure fully the repayment of both interest and principal on loans of this kind. I should like to give some actual figures of what this means. In America at the moment savings banks and other lending agencies are now permitted to make ship construction loans of up to 75 per cent. for a vessel built in the United States and mortgage loans up to 87·5 per cent. The American Government is insuring 100 per cent. of repayment of interest and principal.
A comparison with this country cannot be commenced because the saving institutions, finance houses and institutional investors for the most part will not contemplate this sort of investment. British joint stock banks will advance against mortgage only up to a maximum of 60 per cent., and on their valuation, not on the valuation of ship brokers of the tanker or ship concerned.
That announcement from Washington of what was a tremendous step forward in American tanker construction drew a comment from the shipping correspondent of the Financial Times from which I wish to read two sentences. The comment said:
This development is in sharp contrast to the reluctance by British institutional investors to finance the building of ships. It must be admitted, however, that no encouragement comparable to that in the U.S. has been given to the institutions here by the British Government.… The new loan and mortgage policy is expected to give a stimulus to the big tanker building programme upon which the U.S. is embarking.
Those circumstances provoke many questions, especially when we find they are so adverse to us who pride ourselves on being such leaders in the world financial community. They become even more depressing when we consider the relevant facts and sets of circumstances of the present time. We have, first, the need, even before the Suez dispute, somehow to solve the future of oil transportation. That has been clear, given the projected demand figures that have been worked out over the next 10 or 15 years.
Second, we have had to consider, since the Suez dispute, the possibility of achieving economic independence of the Suez Canal; at least, economic independence of the Canal in so far as this particular commodity and its


transport is concerned. I hesitate to quote the Financial Times a second time, but there was a very good leader in it on 16th November on this question of the relevance of the Canal to our supply of oil, and it put the matter like this:
In practice, this means that Suez as soon as possible should be used only as a marginal route for oil. It means that at every stage the British economy will have to be adapted to make way for the construction of an adequate fleet of British super-tankers.
I realise that that carries many implications, not only in the financial world, but for the steel industry, and for the provision of dry docks and the ship repairing industry as well. These are two needs—one which arose before and one which has arisen since Suez—which aggravate the already adverse trend between ourselves and other nations.
There is the third need of not being dependent upon the foreign operators and foreign owners of tonnage. It is possible that we can jump from the frying pan into the fire, and escape from the foreign control of a transport route and find ourselves at the mercy of foreign control of a method of transport. For example, this year, it is true that British tanker tonnage still leads the world, but this year, for the first time, the combined tanker fleets of Panama and Liberia will exceed this tonnage. What is worse, the projected programme for the next few years will widen that discrepancy. One is not being alarmist to point out the dependence of this country on foreign-owned and controlled tanker fleets. This is a further factor which makes this financial reluctance at home so worrying.
Last of all there is the size of the financial problem. It has been estimated that the tanker construction programme outside North America for the next five years will cost at least £300 million a year and we have to set that on top of the capital commitments which the oil industry has already taken on, such as exploration and the development of existing installations. It is quite beyond the capacity of the industry to do both these jobs. In any case, I do not think it is fair to ask the oil industry to attempt to do both, because these companies are mainly oil producers and refiners, and there is a sensible and prudent limit beyond which

they should not go in owning their own shipping transport.
These are four sets of circumstances which in the last few months have raised the question of how to build tankers and find the money for British tankers, and which make the whole thing so depressing. All these circumstances are within the knowledge of the Treasury, and I hope that these circumstances have already provoked questions. I hope that the implications of those questions have already produced some tentative solution in the mind of the Government. I hope the Economic Secretary to the Treasury will therefore tell us that there is some action which the Treasury could take or some advice which the Treasury could give to those people who are prepared to listen to the Treasury on a matter of national importance.
What is for me, in raising this question, the paramount consideration is that British financial institutions are at present so reluctant. Is there a difficulty in respect of which the Treasury can help? I do not know; perhaps the Economic Secretary can help me. Why do our financial institutions take the view which they do take about investing in tanker construction and in ship construction generally? Such investment is quite comparable to investing in real estate. They would have actually something on the stocks, a mortgage situation and a charter party, which is something comparable to a longterm lease. It is quite comparable; indeed, I think that many oil companies are a better security than many property companies.
Our institutions and finance houses take a view as to the merits of that sort of investment entirely different from that of their opposite numbers in the European and North American countries. I should like to know why. I hazard this as a suggestion. It may be in some way connected with the present structure of short-term and long-term interest rates. It may be that the structure of British interest rates is such at the moment that it is not sufficiently remunerative for people to put their money into tankers or the period of investment is too long. If that is so, it is within the power of the Treasury to consider how far the interest rate structure can be altered so as to produce an incentive to those who have the money to invest in tanker construction.
What I think cannot be said is that the money is not there. The money is always there, but at the moment it is going into something else. The question at issue is why it is not going into tanker finance and the construction of tankers as it is in Europe and in North America. Many fine things have been said about British finance and the British financial mechanism. In an Adjournment debate perorations are never quite in place and usually there is not enough time to make them anyway. However, I should like to say that the tradition of British finance, as I understand it, is not only one of integrity; it is also one of adaptability and enterprise, especially when it is presented with a novel problem or a new need.
If we in this country are to continue for the rest of this century as world bankers—and, as sterling area bankers, we are world bankers—we have to solve this problem and similar ones. If we fail to solve it and we allow others to enjoy the fruits of their initiative, that will be our own fault. In the jargon of the City, there will be big pickings, very large profits, which we should not allow to pass to overseas financial centres.
I hope that the Economic Secretary to the Treasury will say something tonight which will show an alertness to this problem and a determination to do something about it.

9.58 p.m.

Commander J. W. Maitland: First I wish to congratulate my hon. Friend the Member for Liverpool, West Derby (Mr. Woollam) for taking the opportunity to raise what, I think, is one of the most urgent and important questions of how we should use our financial resources, especially at present. Although nowadays our tanker fleets are perhaps the most important part of our mercantile marine, it is nevertheless true, as the Economic Secretary knows very well, that this problem of raising the money to build ships, either to increase the size of the fleets or to maintain and replace existing ships, also extends to other branches as well.
Our supremacy in mercantile marine is one of the last supremacies which we have, and behind it has been built up many of our invaluable invisible exports, The City of London, Lloyd's, merchant banking—so many of these things have

been built up on the development of our mercantile marine. It is difficult to see how they would be able to carry on in the position which they have achieved if we were to sink to second or third place in importance in the sphere of merchant shipping.
This question of tankers is absolutely vital. I should like to go a little further than my hon. Friend. The question of resources and materials goes deeper than he suggested and further than can be discussed during a short debate like this. It is no use building big ships unless we have deep-water harbours for them. It is no use trying to build big ships on slips which cannot accommodate them. There is a tremendous amount of capital investment to be faced if we are to go in for a policy of big tankers, as I believe we must.

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Barber.]

Commander Maitland: It is not a problem facing only this country. In the Gulf, in America, they have very much the same problem. There they can handle only small tankers, but they will very soon be turning to the various problems hingeing upon this question of the building of large tankers. We are starting level. It would be an absolute tragedy if we allowed them to pass us.
I agree with every word my hon. Friend the Member for West Derby has said, but I do not think he made this point, that the problem of finance is bound up with the very size of the ships the building of which is contemplated. If we are to be completely free of the Canal, we shall need 80,000-ton ships. If our tankers are to use the Canal just in ballast, the least that will be much good economically will be 65,000-ton ships. Those ships cannot be handled at present in this country.
This is a matter which really does need imaginative Government action. The question of finance is vital, and I hope that the Government will realise how important it is and what a tremendous, complicated business it all is, and that it will require enormous finance to get and


to keep supplying this country's oil requirements, if that is to be done by big tankers, and if we are to continue to lead the world in merchant shipping.

10.2 p.m.

The Economic Secretary to the Treasury (Mr. Nigel Birch): My hon. and gallant Friend the Member for Horncastle (Commander Maitland) has paid a very well deserved tribute to my hon. Friend the Member for Liverpool, West Derby (Mr. Woollam) for the way he introduced this subject, and I think the whole House and, indeed, the country are indebted to him for raising a subject of the utmost importance which is very much in all our minds today.
I would start by putting on record certain things which are common ground between us all. I think we all agree that it is vital that the United Kingdom's tanker fleet should be expanded as rapidly as possible in order to meet the demands of an expanding trade. It is also, I should say, a matter of common agreement that the commercial incentive for that expansion does exist. By commercial incentive I mean that the tanker freights are relatively higher and more remunerative than freights for other classes of traffic. It is also common ground that it is in the highest degree desirable that British owners should have a greater share in the world's tanker tonnage.
At present British owners have 8 million tons of tanker shipping, and that is about 18 per cent. of the total tanker tonnage in the world. Of the United Kingdom's tanker tonnage about one-third is owned by United Kingdom oil companies. Of course, their own tankers do not anything like meet their requirements, and they, therefore, use independent British owners, and also, and to an increasing degree, they are forced to charter foreign tankers. Therefore, as I say, it is obviously most highly desirable that there should be a rapid expansion in the proportion of oil products which are carried in British ships.
This debate, of course, is about finance, but it is to put things rather out of focus to suppose that finance is the main difficulty with which we have to deal. It is fair to say that the main difficulty is the shortage of capacity in British shipyards

and the shortage of material, particularly of steel. But though finance is not the main obstacle, it certainly presents certain difficulties, and the Government are by no means complacent upon this matter.
It is, however, a mistake to suppose that any difficulties that exist at the moment have very much to do with the credit squeeze. The directive to the Capital Issues Committee classes shipbuilding as being an industry having a
definite urgency under current requirements.
That means, in fact, that if finance is sought for this purpose it will be available. That is to say, the Capital Issues Committee will put no obstacle in the way of the money being raised.
It is perfectly true that the practice of British banks is different from the practice of a great many foreign banks. Many foreign banks grant what are called term loans, that is, they are willing to grant a mortgage on a tanker, repayments being made over the period of the time charter and, in some cases, even over the period of the life of the ship, whereas, though they sometimes grant term loans, British banks more generally grant credit only for the actual construction of the vessel and they leave the longer term finance to be provided by other institutional investors. These institutional investors, which of course include the insurance companies, have very substantial sums available and they normally like to lend on fairly long term and have their loan secured on the assets of the company seeking the loan.
But in addition to the banks providing short-term finance and the institutional investors providing longer loans, other special facilities are provided in the City of London by the Ship Mortgage Finance Company, which was set up in 1951 for the express purpose of lending on ship mortgage for ships built in United Kingdom yards. Therefore, it is true to say that there is in the City of London a wide range of financial facilities. Oddly enough, in some ways foreign owners seem to have been keener to take advantage of these facilities in the City of London than have been British owners. But having said that there is this wide range of facilities, I think that there is force in the criticism that there is a gap, that is to say, that there is not sufficient


capital available for term loans secured on tanker mortgages, and it can be said that the banks in Britain lend too short and the other financial institutions lend too long.
My hon. Friend the Member for West Derby asks me to show sympathy and alertness. I assure him that the Treasury, as ever, is both sympathetic and alert to everything that tends to the good of the country. I can say that this matter is engaging our most earnest attention. My hon. Friend will not expect me to issue or to expound a new policy, but we are aware of the difficulty. We are neither unalert nor unsympathetic and I trust that means will be found.

Mr. Collick: Before the Minister finishes his speech, could he give the House some further information? Would it be correct to say that our tanker building capacity in our shipyards at the moment is fully used, or is it less than fully used?

Mr. Birch: As far as I am aware, it is fully used. The hon. Gentleman interrupted my eloquent peroration. All I was saying was that we will do our best, and I am deeply grateful to my hon. Friend for raising this very important matter.

Question put and agreed to.

Adjourned accordingly at eleven minutes past Ten o'clock.